If you read about the First Home Guarantee more than a year ago, almost everything you remember about it is now out of date. The scheme was renamed, the income caps were removed, the place limit was abolished and the price caps went up. Plenty of articles still describe the old version — including some published this year.
What it is called now
It is the Australian Government 5% Deposit Scheme. Same idea as the old First Home Guarantee: instead of you paying Lenders Mortgage Insurance, the government guarantees part of your loan, so an eligible buyer gets in with a 5% deposit and no LMI.
LMI on a typical purchase runs to many thousands of dollars added to your loan, so avoiding it is not a small saving.
The three changes that matter
No income caps
The old scheme cut out at $125,000 for a single buyer and $200,000 for a couple. Those caps are gone. Your income still determines how much you can borrow through ordinary serviceability assessment, but it no longer disqualifies you from the scheme.
This is the change most people have not heard about, and it brings in a lot of buyers who previously assumed they earned too much to qualify.
No limit on places
There used to be an annual quota, which meant a scramble each July and people missing out for no reason other than timing. The quota is gone. Every eligible applicant can use it.
Higher price caps
The caps went up across the board. Capital city and regional centre figures, with the rest of each state in brackets:
- NSW $1,500,000 (rest of state $800,000)
- Victoria $950,000 ($650,000)
- Queensland $1,000,000 ($700,000)
- Western Australia $850,000 ($600,000)
- South Australia $900,000 ($500,000)
- Tasmania $700,000 ($550,000)
- ACT $1,000,000 (all areas)
- Northern Territory $750,000 ($600,000)
One detail that catches people: both the purchase price and the lender’s assessed valuation must sit at or below the cap. Buy at $895,000 and have the lender value it at $910,000 and you do not qualify. Caps can also differ by postcode within a region, so check rather than assume.
What has not changed
- It is for first home buyers, and the property must be one you live in.
- You have to go through a participating lender.
- Single parents have a separate, more generous entry point at a 2% deposit.
- The usual property types are covered: houses, townhouses, units, new or existing, plus house-and-land packages, off-the-plan and vacant land with a building contract.
The part the scheme does not solve
A 5% deposit gets you past the deposit hurdle. It does not increase how much you can borrow — that is still ordinary serviceability, and for most buyers that, not the deposit, is the binding constraint.
It is also worth remembering that a smaller deposit means a bigger loan and more interest over the life of it. Avoiding LMI is a real saving, but the scheme is a way in, not a discount.
Do not stop at the federal scheme
The 5% deposit scheme is national and identical everywhere. Grants and stamp duty concessions are state programs and they are not identical at all — the amounts differ, and so does the far more important question of whether established homes qualify or only new builds.
South Australia, where we are based, is a clear example: the state grant of up to $15,000 and the stamp duty relief both apply to new homes only, which makes new and established homes at the same asking price quite different purchases. Other states draw that line elsewhere.
Our first home buyer page lists every state and territory revenue office so you can check the one that applies to you.
Worth checking where you actually stand
Government schemes change, which is exactly the point of this article. Confirm the current rules at firsthomebuyers.gov.au, and if you want to know what you could borrow and which benefits apply to your situation, that is a short conversation.
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Scheme details verified 18 August 2026 against firsthomebuyers.gov.au and RevenueSA. General information only — it does not take your objectives, financial situation or needs into account and is not credit assistance. Eligibility depends on your circumstances and the lender’s assessment. Easy Loan Finance is a Credit Representative (CRN 568863) of Beagle Finance Pty Ltd, Australian Credit Licence 383640.
