How the Home Guarantee Scheme Helps First Home Buyers in Brisbane
- Lachlan McKean
- 12 minutes ago
- 5 min read
The Australian Home Guarantee Scheme offers major benefits for first home buyers, including low deposit home loans, exemption from lender mortgage insurance, and expanded government guarantees to make home ownership more achievable throughout Australia. This article will fully explore these features, answer commonly asked questions (PAA), and provide up - to - date guidance for first home buyers based on the latest government policy changes effective from October 2025.
Overview: Home Guarantee Scheme
The Home Guarantee Scheme (HGS) is an Australian Government initiative designed to help eligible home buyers enter the property market sooner by reducing deposit requirements and eliminating the need for lender mortgage insurance (LMI).
From 1 October 2025, the scheme is more accessible than ever, now offering:
Unlimited places (no caps on the number of participants)
Higher property price caps to match rising home values across Australia
Support for first home buyers nationally, as well as regional buyers and eligible families.
Some Questions Answered!
How does the Home Guarantee Scheme help first home buyers buy sooner?
The scheme allows eligible buyers to purchase homes with as little as a 5% deposit, backed by a government guarantee. This lowers upfront costs, removes the need for Lenders Mortgage Insurance, and enables faster entry into the property market.
What financial barriers does the Home Guarantee Scheme reduce for first home buyers?
By providing a guarantee to lenders, the scheme reduces the required deposit from 20% to 5%, helping buyers avoid costly mortgage insurance and saving years of saving, making homeownership more accessible for low - to - middle income earners.
Who benefits from the Home Guarantee Scheme’s lower deposit requirement?
First home buyers, single parents, and regional buyers can buy with as little as 2% - 5% deposit. This increases affordability, allowing more Australians to own homes sooner without requiring traditional guarantors or large upfront deposits
To be eligible, you must be a first home buyer, at least 18 years old, an Australian citizen or permanent resident, and buying a new or substantially renovated property under $750,000. You’ll also need to live in the home for at least six months within the first year. LBK Lending can help you check your eligibility and apply with confidence.
Key Benefits for First Home Buyers
Low Deposit Home Loans
Buyers can purchase a home with a deposit as low as 5% of the property value, compared to the standard 20% required by most lenders.
This dramatically shortens the time needed to save for a deposit.
For eligible single parents, the deposit requirement can be as low as 2%.
Exemption from Lender Mortgage Insurance (LMI)
LMI typically protects the lender, not the buyer, and is charged on loans where the deposit is under 20%.
Under the HGS, Housing Australia provides a government guarantee to the lender, covering up to 15% of the property’s value (or 18% for single parents), so buyers do not need to pay LMI, saving thousands of dollars.
Government Loan Guarantees
The Government guarantee is not a cash payment to buyers but a legal arrangement that protects lenders against shortfalls if the property is sold after a default.
The guarantee allows banks and lenders to offer home loans to buyers with lower deposits and without LMI.
This arrangement does not cover missed payments but helps the lender cover losses only after other funds have been applied and the property is sold.
What Are The Recent Scheme Updates - October 2025 Changes
Now unlimited places: every eligible first home buyer can access the scheme, no waitlists or quotas.
Property price caps have increased: making it possible to purchase homes that better suit family needs, in line with market conditions.
Regional and family-focused pathways still available for buyers outside metropolitan areas or single parents.
What Is The Eligibility Criteria
Must be an Australian citizen or permanent resident at the time of signing the home loan.
Applicant must be 18 years or older.
Buyers must have a minimum deposit (typically 5% of the property value).
First home buyers, or those who haven’t owned a home in Australia in the last 10 years, are eligible.
Buyers must plan to live in the home (investment properties not eligible).
Step-by-Step: How the Guarantee Scheme Works
Check eligibility using Housing Australia’s guidelines.
Contact a participating lender from Housing Australia's approved panel.
Submit documents and get pre-approved for a place in the scheme.
Find and purchase a home within local price caps using the guarantee.
No LMI charged on the loan, and the government guarantee applies while buyer meets all occupancy and eligibility criteria.
Common Questions People Ask
1. Who qualifies for the Home Guarantee Scheme?
Eligible applicants include Australian citizens or permanent residents aged 18+, who are first home buyers or have not owned a property in Australia in the last 10 years. Both singles and joint applicants may apply.
2. How much deposit is needed for a first home loan under the scheme?
The minimum deposit is 5% for most buyers. Single parents may qualify for a 2% deposit pathway.
3. What is lender mortgage insurance (LMI)? Why is it not required?
LMI is usually charged by lenders to safeguard against borrower default when the deposit is below 20%. Under the scheme, the government guarantee replaces the need for LMI, allowing buyers to save thousands.
4. What if I default on my home loan?
The guarantee protects the lender - not the buyer - if the home is sold after default and the sale does not cover the full loan amount. The buyer is still responsible for meeting repayment terms.
5. Are there price or income caps?
From October 2025, property price caps have been increased for greater access. Income caps may also be removed or relaxed in the latest scheme expansion, but check the latest Housing Australia updates for specifics.
6. Does the scheme apply to new builds and existing homes?
Yes, buyers can purchase either new or existing properties, including townhouses and apartments, provided they meet eligibility and live in the property.
7. Is ongoing eligibility required?
Yes. To keep the guarantee active, buyers must continue living in the home as their principal place of residence.
8. Can regional buyers and single-parent families apply?
Regional buyers and single-parent families have dedicated scheme pathways, with additional concessions for deposits and property locations.
Practical Examples: How the Scheme Helps
A first home buyer in Brisbane can now purchase a $1 million home with only a $50,000 deposit, saving up to a decade in deposit savings and avoiding $17,000+ in LMI costs.
Eligible buyers in Queensland can get up to $55,000 in total support combining cash grants and the national guarantee scheme benefits.
FAQ Quick Reference Table
Question | Short Answer |
Minimum deposit for first home buyers? | 5% (2% for single parents) |
Do buyers pay LMI? | No LMI charged under the scheme |
Who is eligible? | Australians 18+, first home buyers or not owned a home in 10 years |
What does the government guarantee cover? | Lender protection on default, not missed payments |
Can I buy in regional areas? | Yes, dedicated regional pathways exist |
Summary
The Home Guarantee Scheme presents a powerful opportunity for first home buyers across Australia to overcome traditional market barriers - benefiting from low deposit home loans, exemption from costly lender mortgage insurance, and expanded government - backed loan guarantees. With recent changes in October 2025 making the scheme available to more buyers and expanding property price caps, it's easier than ever to make the Australian dream of home ownership a reality.
For more detailed eligibility information and how to apply, consult the Housing Australia website and speak with participating lenders for tailored advice.
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