The First Home Guarantee Explained: Who Qualifies and How a Broker Helps

What the First Home Guarantee actually is

The First Home Guarantee is a federal scheme, administered by Housing Australia, that lets eligible first home buyers purchase with as little as a 5% deposit and no Lenders Mortgage Insurance. The government guarantees a portion of your loan directly to the lender, up to 15% of the property value, which is what allows the lender to approve a 95% loan without charging LMI.

It's not a cash grant. You still borrow the full 95% of the purchase price and remain fully responsible for every repayment. The guarantee sits between you and the lender, not in your bank account.

Who qualifies

Australian citizen or permanent resident, aged 18 or over
A genuine first home buyer, meaning you and any co-applicant haven't previously owned property in Australia, with some limited exceptions
Buying as an owner occupier and moving in within the required timeframe, typically within six months of settlement
At least a 5% deposit made up of genuine savings or an eligible equivalent
The property's value falls under the price cap for its postcode

That last point trips people up more than any other. The cap applies to the property's value, not just what you agree to pay, so if a valuation comes in above the threshold you can end up ineligible even on a fair purchase price.

What's changed recently

The scheme became significantly more accessible from 1 October 2025. The income caps that previously excluded higher earning buyers were removed, the annual limit on how many places were available each year was scrapped, and price caps were lifted to better reflect what homes actually cost.

Price caps still vary by postcode and are reviewed periodically, so the figure for a Shoalhaven or Illawarra address won't necessarily match the headline caps you'll see quoted for Sydney. It's worth confirming the exact cap for your target suburb before you start inspecting.

How a broker actually helps with this one

You can't apply for the First Home Guarantee directly. It's arranged through a participating lender or a broker working across that panel, which is where a lot of the practical value sits.

Confirming your eligibility early, before you've started inspecting or made an offer
Checking the correct price cap for the postcode you're looking in
Comparing how different participating lenders treat the scheme, since serviceability and policy can differ even though the scheme rules are federal
Handling the timing and paperwork so your place is secured before you're under contract pressure
Weighing up whether the First Home Guarantee or another pathway, like a guarantor loan, suits your situation better

Next step

If the scheme sounds like it could apply to you, the detail is worth working through properly rather than guessing from a checklist online. It starts with a coffee. Bring your questions and we'll walk through eligibility and the cap for wherever you're looking. Contact Shorebreak Finance today to make this exciting wealth creation step a reality.