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March 12, 2026
First Home Guarantee Scheme (FHBG) 2026: Your Complete Guide to Buying with a 5% Deposit
Lodge Pro•Blog•5 min read
Unlocking the Door: Your Guide to the First Home Guarantee Scheme
Table of Contents
What is the First Home Guarantee (FHBG)?
Major Updates for 2025/26
Who is Eligible?
Why Choose LodgePro for Your First Home Journey?
Getting into your first home can often feel like a marathon with no finish line in sight. Between fluctuating property values and the high cost of living, saving the traditional 20% deposit is a significant hurdle for many Australians. However, the Australian Government’s First Home Guarantee (FHBG) - strengthened by 2025/26 updates - is designed to turn that dream into a reality much sooner than you think.
In this guide, we’ll break down the latest updates to the First Home Guarantee, how it works, and how you can take advantage of it to secure your first home with as little as a 5% deposit.
What is the First Home Guarantee (FHBG)?
The First Home Guarantee is a flagship initiative of the Australian Government’s Home Guarantee Scheme (HGS), administered by Housing Australia. Traditionally, if you purchase a home with less than a 20% deposit, lenders require you to pay Lenders Mortgage Insurance (LMI). This is a hefty fee that protects the lender, not you, and it can cost upwards of $30,000 depending on your loan size.
Under the FHBG, the Government acts as a guarantor for up to 15% of the property’s value. This allows eligible buyers to purchase a home with a minimum deposit of just 5% without the burden of LMI. By removing this barrier, the scheme can shave years off your savings timeline.
Major Updates
The Australian Government has implemented significant expansions to ensure the scheme keeps pace with the modern market. Here are the key pillars of the current program:
Expanded Eligibility: The scheme is no longer strictly for "first-time" buyers in the literal sense. It is now open to those who have not owned a property in Australia in the last 10 years, helping those re-entering the market.
Joint Applications: You can apply with friends, siblings, or partners. The scheme has evolved to recognize the diverse ways Australians team up to buy property.
Increased Property Price Caps: To reflect market growth, price caps have been adjusted across capital cities and regional centres to ensure a wide range of homes remain accessible.
Permanent Resident Inclusion: The scheme is open to both Australian Citizens and Permanent Residents.
Who is Eligible?
To benefit from the 5% deposit scheme, you must meet the following core criteria:
Status: Australian citizen or permanent resident, at least 18 years old.
Income Limits: For the current financial year, the annual taxable income must be up to $125,000 for individuals and $200,000 for joint applicants.
Owner-Occupier: You must intend to live in the property as your primary place of residence.
Deposit: You must have at least 5% of the property value saved as "genuine savings."
Why Choose LodgePro for Your First Home Journey?
Navigating government schemes and comparing hundreds of home loan products can be overwhelming. LodgePro simplifies this journey. We aren't just a service; we are your advocates in the lending market. With access to 70+ lenders, including major banks and specialized providers participating in the FHBG, we ensure you find a mortgage that fits your life- not just any loan. Visit us to learn more