Article by Stanislav Tarasenko | Updated: 4 June 2025
Buying Your First Home: How Government Schemes Can Help You Get There Sooner
For many Australians, buying a home is one of the biggest milestones in life—but for first-time buyers, saving 20% for a deposit can feel impossible. Rising property prices and everyday living expenses often push homeownership further out of reach.
The good news? There are government-backed schemes designed to help first home buyers step into the market sooner. Some of these programs even allow you to buy with just 5% deposit, while avoiding expensive Lenders Mortgage Insurance (LMI). That could mean saving thousands of dollars and achieving your dream of homeownership much sooner than expected.
What You’ll Learn in This Guide
We’ll break down everything you need to know, including: ✅ How the First Home Guarantee (FHG) works
✅ Who is eligible for the scheme
✅ The realities and risks to consider
✅ Savings breakdown and calculations
✅ Real case studies of first home buyer success stories
✅ Common myths and frequently asked questions
✅ Expert mortgage broker tips to help you navigate the process
✅ Stamp duty exemptions and discounts that may apply
Let’s dive in.
What is the First Home Guarantee (FHG)?
The First Home Guarantee (FHG) is a government-backed program designed to help first-time buyers get into the property market sooner. Delivered by NHFIC (National Housing Finance and Investment Corporation), it allows eligible buyers to:
- Buy a home with just a 5% deposit
- Avoid paying Lenders Mortgage Insurance (LMI), which could save thousands
- Have the government guarantee the remaining 15% (for a total 20% coverage)
This means no need to wait years to save a full deposit. The government’s guarantee reduces financial barriers, so you can secure a home much sooner.
Other Schemes Available
Alongside the First Home Guarantee, other programs exist to help Australians enter the property market:
- Regional First Home Buyer Guarantee – Tailored for buyers in regional areas, offering the same benefits.
- Family Home Guarantee – Helps single parents purchase a home with just a 2% deposit, making homeownership more accessible.
Who is Eligible?
Basic Requirements:
| Criteria | Requirement |
|---|---|
| Citizenship | Australian citizen or permanent resident |
| Income | Up to $125,000 (individual) or $200,000 (couple) |
| First Home | Never previously owned residential property in Australia |
| Property Type | Must be owner-occupied, not an investment |
| Deposit | Between 5–19% of the purchase price |
| Co-buyers | Allowed to buy with friend, sibling, or partner |
What Are the Real Benefits?
Example Calculation:
Property Price: $600,000
| Item | Without the Scheme | With the Scheme |
| Required Deposit (20%) | $120,000 | $30,000 |
| LMI (Estimated) | ~$20,000 | $0 |
| Total Needed Before Loan | $140,000 | $30,000 |
You could save over $110,000. This could be equal to 5-7 years of savings for many people.
Check out our deposit calculator and loan repayments calculator to estimate your savings and borrowing potential.
Real World Situations
- Emma, 28, Nurse from Victoria: “I saved for three years and still wasn’t close to 20%. FHG let me into my own home within four months of applying.”
- Adam & Josh, 32 in software development/design: “We bought a house together as friends. Even though we are not a couple we successfully qualified for and received a 5% deposit loan with no LMI. Now we co-own a home in Brisbane.”
Frequently Asked Questions
Is it dangerous to buy with only 5% deposit?
It depends on your income and budget. NHFIC has reported that less than 0.1% of participants have defaulted on repayment.
Check and improve your credit score prior to applying to reduce risk and increase the chance of a successful application.
Do I have to repay the government?
No. This is not a loan. The government is acting as a guarantor and enabling you to avoid LMI.
Can I apply if I owned a home a decade ago?
No. You must be a first home buyer with no previous ownership of property.
Is the scheme applicable to new builds?
Yes, as long as the property is suitable for habitation and you are planning to occupy it as a home full-time.
Things to Consider When Buying Property in Sydney
- Higher interest rates: Smaller deposit/equity may provide slightly better rates (Compare variable and fixed rate mortgages)
- Limited lender choice: Not every bank offers FHG loans, and the list continues to grow
- High demand: Limited places are filled on a quota basis
- Resale risk: Selling too quickly may result in a financial loss
Expert Tips from Mortgage Brokers
- Monitor your credit score early on
- Employ NHFIC’s online eligibility calculator
- Apply at the very beginning of the financial year when quotas are reset
- Get pre-approval before starting your house hunt
- Use a licensed mortgage broker with experience of FHG lenders
Navigating the home loan process can be overwhelming—but you don’t have to do it alone. At CBM Mortgages, we specialise in helping first home buyers find the right loan, access available grants, and simplify the process.
📞 Need expert guidance? Contact CBM Mortgages today, and we’ll help you:
✅ Determine your eligibility for government schemes
✅ Compare home loan options to find the best deal
✅ Understand your borrowing power with our loan calculators
🚀 Take the next step toward owning your first home! Explore our First Home Buyer Guide.
Want more insights? Download our Home Buying Guide to get expert tips for first-time buyers!
Read another one of our blog post on First Home Buyer government schemes here
