First Home Guarantee (NHG)
Buy Your First Home with 5% Deposit and No LMI
By Chaice Paterson, Founder, Low Deposit Homes
The First Home Guarantee (NHG), formerly called the First Home Loan Deposit Scheme (FHLDS), is one of the most powerful tools available to Australian first home buyers. It lets you buy with just a 5% deposit while the government guarantees the rest, meaning you pay no Lenders Mortgage Insurance (LMI).
That alone can save you $20,000–$35,000 in upfront costs.
How the First Home Guarantee Works
Normally, if you borrow more than 80% of a property’s value, your lender charges Lenders Mortgage Insurance (LMI). LMI protects the bank (not you) and can cost tens of thousands of dollars.
The First Home Guarantee changes this equation:
- You save a 5% deposit
- The Australian Government (through Housing Australia) guarantees up to 15% of the property value
- Your lender treats your loan as if you have a 20% deposit
- You pay no LMI
Important: The government doesn’t give you money or pay your deposit. They guarantee the gap between your deposit and 20%, which eliminates the need for LMI.
Who Is Eligible?
Income Requirements
As of October 2025, income limits no longer apply. There are currently no maximum income caps for eligibility.
Personal Requirements
- Australian citizen(s) or permanent residents aged 18 or over
- First home buyers (never owned property in Australia) OR previous homeowners who haven’t owned in the last 10 years (under certain guarantee types)
- Buying to live in the property (owner-occupier, not investor)
Property Price Caps
The NHG has property price caps that vary by location. These caps change each financial year. As a guide:
- Sydney: Up to $1,500,000
- Melbourne: Up to $950,000
- Brisbane: Up to $1,000,000
- Regional QLD: Up to $700,000
- Regional VIC: Up to $650,000
Types of Home Guarantees
Housing Australia actually runs several guarantee schemes under the NHG umbrella:
First Home Guarantee (FHBG)
- For first home buyers
- 5% deposit minimum
- Most popular option
Regional First Home Buyer Guarantee (RFHBG)
- For buyers purchasing in regional areas
- Must have lived in or adjacent to the region for at least 12 months
- Available to previous homeowners who don’t currently own property
Family Home Guarantee (FHG)
- For single parents or single legal guardians with at least one dependent
- Buy with as little as 2% deposit
- Doesn’t have to be your first home
How Much Does the NHG Save You?
On a $950,000 house and land package, the standard 20% deposit would be $190,000. With the NHG, you could save approximately $25,000 –$40,000 in LMI, purchase with just $47,500 deposit, and enter the market with $142,500 less upfront savings required, all while avoiding a significant LMI cost. And because new builds attract $0 stamp duty for first home buyers (around $38,000 saved on a $1,000,000 purchase) on top of no LMI, a $1,000,000 Queensland new build typically needs about $54,500 to get into — versus about $122,000 for an established home of the same price, a saving of roughly $67,500
Without NHG
Option 1 – 20% Deposit
20% deposit: $190,000
LMI: $0
Without NHG
Option 2 – 5% Deposit
5% deposit: $47,500
LMI: ~$25,000–$40,000
with NHG
5% deposit: $47,500
LMI: $0
How to Apply for the First Home Guarantee
You cannot apply directly to Housing Australia. You must go through a participating lender, this includes major banks and many smaller lenders.
Steps:
- Check your eligibility against the criteria above
- Choose a participating lender (your mortgage broker can help)
- Apply for a home loan and indicate you want a NHG place
- The lender reserves a place for you from their allocation
- Find a property within the price cap for your area
- Settle and move in
Working with a Broker
A mortgage broker who understands the NHG can:
- Find the best interest rate among participating lenders
- Structure your application to maximise approval chances
Low Deposit Homes works with brokers who specialise in NHG applications.
Combining the NHG with Other Schemes
The NHG stacks beautifully with other first home buyer benefits:
- FHOG: $30,000 in QLD or $10,000 in VIC on top of your NHG-supported purchase
- FHSS: Use super savings for your 5% deposit
- Stamp Duty Concessions: Reduce or eliminate stamp duty
Can You Use the NHG for a New Build?
Yes and in many ways, new builds are ideal for the NHG because:
- House and land packages often fall within the price caps
- The price is fixed at contract signing (no auction risk)
- You combine the NHG with the FHOG (which only applies to new homes)
- Build times give you extra time to save for settlement costs
How Low Deposit Homes Helps!
- Connect you with proven builders in QLD and VIC
- Help you access and stack every grant you’re eligible for
- Work with brokers who specialise in low-deposit lending
- Guide you through the entire process from first conversation to getting your keys
It costs you nothing to chat with us. We earn our fee from the builder, not from you. Ready to see what you qualify for? Book a free 15-minute consultation and we’ll map out your options.
Frequently Asked Questions
Is the First Home Guarantee the same as the First Home Loan Deposit Scheme?
Yes, the First Home Loan Deposit Scheme (FHLDS) was renamed to the First Home Guarantee (FHBG) in 2022. It works the same way: 5% deposit, no LMI.
Do I have to pay back the government guarantee?
No. The guarantee is not a loan or a debt. It simply sits behind your mortgage so the lender doesn’t charge LMI. You only repay your home loan as normal.
What happens if I sell the property?
You can sell at any time. The guarantee simply ceases. If you want to buy another property later, you won’t be able to use the NHG again (unless eligible for a different guarantee type).
Can I use the NHG with any lender?
No, only participating lenders can offer NHG places. Your broker can tell you which lenders have availability. Not all lenders participate, and those that do receive a limited allocation.
How quickly do NHG places run out?
It depends on the financial year. Some years, places are gone within months. Other years, there’s availability throughout the year. The safest approach is to apply early in the financial year (from July).
Eligibility criteria, property price caps, and place limits for the First Home Guarantee change each financial year. Verify current details on the Housing Australia website before applying.