First Home Guarantee (FHBG) — what’s changed from 1 October 2025, how it helps, and who can use it

Buying your first home is one of the biggest milestones in life — but let’s be honest, it’s also one of the toughest financial challenges most Australians face. Between rising living costs, record property prices, and the daunting task of saving a 20% deposit, many first-time buyers feel like home ownership is slipping further out of reach.

The good news? The First Home Guarantee (FHBG) is designed to change that story. It’s one of the Australian Government’s key initiatives aimed at helping Australians fast-track their way into home ownership — and from 1 October 2025, the scheme received a major upgrade that makes it more accessible, more flexible, and far more powerful for everyday buyers.

💡Not to be confused with the First Home Owner Grant (FHOG)
The FHBG is separate from the state-based First Home Owner Grant, which is a cash rebate only available for newly built homes, off-the-plan purchases, or substantially renovated properties that have not been lived in since the renovations were completed.

The great news is that you can use both together if you meet the eligibility criteria for each — meaning eligible buyers could combine the deposit-saving benefits of the FHBG with the cashback boost of the FHOG.

What’s new from 1 October 2025 (national changes)

From 1 October 2025, the FHBG has been expanded with several game-changing updates:

Unlimited places — no more annual caps. Anyone who qualifies can apply.
No income caps — higher-income earners are now eligible.
Higher property price caps — more homes now fall within the scheme limits.
Simplified structure — the separate Regional First Home Buyer Guarantee has been rolled into a single, national program.
Same core advantage — buy with just a 5% deposit, and the government guarantees up to 15% of your loan amount, helping you avoid Lenders Mortgage Insurance (LMI).

In plain terms: the scheme is now broader, fairer, and open to more Australians who are ready to buy their first home sooner.

Why the FHBG matters (and how it helps)

Lower upfront costs – You only need a 5% deposit, and you skip LMI, which can save you tens of thousands of dollars.
Get in sooner – No need to wait years to reach a 20% deposit target.
More choice – Higher price caps mean you can consider more suburbs or property types.
Greater flexibility – You can apply as a single, a couple, or jointly with a family member or friend, not just a spouse or partner.

Who can apply? (quick eligibility checklist)

To qualify, you generally need to:

Be 18 or older and an Australian citizen or permanent resident.
Have between 5% and 20% deposit saved from genuine funds.
Be a first home buyer, or not have owned property in Australia within the last 10 years.
Plan to live in the property (it must be owner-occupied).
Apply for a principal & interest home loan (up to 30 years) through a participating lender.
Apply alone or with one other person (spouse, partner, relative or friend).

🏡 Tip: Not every lender participates in the scheme. A broker can help identify which banks and credit unions are approved and which offer the most competitive structure for your situation.

Purchase price caps (effective 1 October 2025)

Below are the maximum property prices eligible under the expanded scheme:

State/Territory	Capital city & regional centres*	Rest of state/territory
NSW	$1,500,000	$800,000
VIC	$950,000	$650,000
QLD	$1,000,000	$700,000
WA	$850,000	$600,000
SA	$900,000	$500,000
TAS	$700,000	$550,000
ACT	$1,000,000	—
NT	$600,000	—
JBT & Norfolk	$550,000	—
Christmas/Cocos (Keeling) Islands	$400,000	—

*Regional centres include: Illawarra, Newcastle & Lake Macquarie (NSW), Geelong (VIC), and Gold Coast & Sunshine Coast (QLD).

How it works (the simple version)

Here’s what happens behind the scenes:

You save a 5% deposit.
Your lender provides up to 95% of the loan.
Housing Australia (on behalf of the Government) guarantees up to 15% of the property’s value to your lender.
You avoid Lenders Mortgage Insurance (LMI) — saving potentially tens of thousands.
You must move in within 6 months (or upon completion for a new build).

In short: the government steps in as part-guarantor, reducing the risk for your lender so you can buy sooner without paying the LMI premium.

Real-world example

Case study:
Sarah and Michael have saved $50,000 and want to buy an $850,000 home in Brisbane.

Normally, they’d need a $170,000 deposit to avoid LMI.

Under the FHBG, their 5% deposit ($42,500) is enough. The government guarantees the remaining 15%, so they avoid LMI altogether — saving around $25,000–$30,000 and getting into their new home years earlier.

However, it’s important to note that government charges such as stamp duty and registration fees must also be budgeted for from their savings — unless the property qualifies for a state-based first home buyer stamp duty concession, which in Queensland currently applies in full for homes valued under $700,000 and partially up to $800,000.

What doesn’t change

You still need to qualify for a home loan under normal lending criteria.
It’s for owner-occupiers only — renting it out breaches the rules.
The scheme doesn’t cover your deposit or repayments, it simply helps you avoid LMI.

Next steps for first-home buyers

Check your eligibility – Confirm your citizenship, savings, and ownership history.
Compare price caps – Make sure your chosen suburb fits the new limits. Property Price Caps
Speak to a finance broker – A broker can guide you through eligibility checks, lender options, and how to combine the FHBG with other incentives like the First Home Owner Grant or state stamp duty concessions.

If you’ve been watching the market thinking “maybe next year”, this could be your window. The expanded First Home Guarantee makes buying a first home far more achievable for thousands of Australians who were previously locked out. With higher price caps, no income limits, and the ability to combine with other incentives like the First Home Owner Grant, now’s the perfect time to explore your options and get expert advice before opportunities in your preferred area are snapped up.

Lance King (Green Finance Group) is one of our preferred finance specialists and is available to help you navigate your FHBG eligibility, potential stamp duty concessions, the First Home Owner Grant, and the best pathway from pre-approval to settlement with a participating lender.

Book a free, no-obligation consultation with Lance

Disclaimer: This information is general in nature and does not constitute financial advice. Eligibility and lender credit criteria apply. Speak with a licensed finance professional for personalised guidance before making any financial decisions.