1 May 2023

Will you benefit from the changes to the First Home Guarantee Scheme?

In a latest announcement from the Albanese Government, the criteria to access the First Home Guarantee (FHBG) scheme will be significantly widened beyond married or de-facto relationships.

From 1 July 2023, friends, siblings, and other family members will also be eligible for joint applications under the First Home Guarantee (and the Regional First Home Buyer Guarantee) schemes. These guarantees had previously been restricted to people that were married or in a de‑facto relationship, in addition to single applicants.

The Minister for Housing, the Hon Julie Collins MP has announced the expansion of the guarantees established by the previous government to non‑first home buyers who haven’t owned a property in Australia in the last ten years. This new measure will support those people who have fallen out of home ownership, often due to financial crisis or relationship breakdown. 

The new changes to eligibility for the Family Home Guarantee will extend to eligible borrowers who are single legal guardians of children such as aunts, uncles and grandparents (previously only available to single natural or adoptive parents with dependents). “These are sensible changes that will help ensure more families have a safe and secure place to call home,” Minister Collins said. 

Importantly, all three guarantees will become available to eligible borrowers who are Australian Permanent Residents, rather than only Australian citizens.

These changes will build on last year’s increase in the number of places available and the establishment of Albanese Government’s new Regional First Home Buyer Guarantee.

In total, 35,000 places are available per year across the First Home Guarantee, 10,000 places per year under the Regional First Home Buyer Guarantee, and 5,000 places per year under the Family Home Guarantee. The year in question is the financial year which is from 1 July to 30 June in the following year.

The First Home Guarantee

The First Home Guarantee (FHBG) is part of the Home Guarantee Scheme (HGS), an Australian Government initiative to support eligible first home buyers purchase a home sooner. It is administered by the National Housing Finance and Investment Corporation (NHFIC) on behalf of the Australian Government. 

Under the FHBG, part of an eligible first home buyer’s home loan from a “participating lender” is guaranteed by NHFIC. This enables an eligible home buyer to purchase a home with as little as 5% deposit without paying Lenders Mortgage Insurance (LMI). This insurance fee would otherwise be payable to the lender when a borrower has less than 20% deposit.

Any guarantee of a home loan is for up to a maximum amount of 15% of the value of the property (as assessed by the Participating Lender). The eligible borrower in effect will be able to borrower up to 95% of the value of the security property.

CBA and NAB are the two major banks that are included in the group of participating lenders with the remaining cohort made up by smaller and/or regional lenders.

Currently to be able to apply for the FHBD, home buyers must be:  

  • an Australian citizen at the time they enter the loan
  • applying as an individual or couple (married / de facto)  
  • at least 18 years of age
  • earning up to $125,000 for individuals or $200,000 for couples, as per Notice of Assessment
  • intending to be owner-occupiers of the purchased property  
  • first home buyers who have not previously owned, or had an interest in, a property in Australia.

Property price caps do apply, depending on the state territory and location. For NSW, for example, the price cap for the property in the capital city or regional centre, is $900,000 while if the property is located in the rest of the state, the price cap is $750,000. Check the price cap that applies to you here: https://www.nhfic.gov.au/support-buy-home/property-price-caps.

The widened criteria for the guarantee schemes reflects a changing make-up of the Australian households. Friends and family members will be able to “team up” to jointly purchase a new home.

The government also acknowledges that allowing non-first home owners who haven’t owned a property for ten years to access the schemes will be beneficial to people who have fallen out of home ownership due to financial issues or relationship breakdowns.

One demography that is evidently being disadvantaged is the older, divorced women category which are the fastest group to be experiencing homelessness.

The new policy by the Albanese government will be providing vital assistance to these women who have lost their home due to a divorce of separation and are at risk of falling into homelessness.

To Speak to a Broker

Get in touch today if you are interested in speaking to a broker to discuss your scenario and regarding accessing the government’s guarantee schemes. For a faster turnaround, please complete a short online assessment form and one of our brokers will give you a call.


Treasury Media Release – The Hon Julie Collins MP: https://ministers.treasury.gov.au/ministers/julie-collins-2022/media-releases/helping-more-australians-home-ownership

First Home Guarantee – https://www.nhfic.gov.au/support-buy-home/first-home-guarantee