What Is the First Home Guarantee (2026)?
The First Home Guarantee (formerly the First Home Loan Deposit Scheme) is a federal government program that allows eligible first home buyers to purchase property with a deposit as small as 5% — without paying Lenders Mortgage Insurance (LMI). The government guarantees up to 15% of the property value, effectively bridging the gap to the 20% threshold that lenders normally require before waiving LMI.
LMI typically costs between $15,000 and $35,000 on a Sydney property, depending on the loan size and LVR. The First Home Guarantee eliminates this cost entirely for eligible buyers — one of the most valuable financial benefits available to first home buyers in Australia.
🏛️ October 2025 Update: Major Scheme Changes
From 1 October 2025, the scheme was significantly expanded. Income limits have been completely removed. Previous caps of $125,000 for singles and $200,000 for couples no longer apply. Any eligible first home buyer can now access the guarantee regardless of income level.
What Changed in October 2025?
The October 2025 expansion made the First Home Guarantee the most accessible it has ever been. Here is a summary of what changed:
| Criteria | Before October 2025 | After October 2025 |
|---|---|---|
| Income limit (singles) | $125,000 | No limit |
| Income limit (couples) | $200,000 | No limit |
| Sydney property price cap | $900,000 | $1,500,000 |
| Scheme name | First Home Loan Deposit Scheme | First Home Guarantee |
| Family Home Guarantee | Separate scheme | Merged into First Home Guarantee |
The removal of income limits is particularly significant for Sydney buyers. Many dual-income professional households who were previously excluded — nurses and teachers buying together, or young professionals in tech or finance — are now eligible. This opens the scheme to a much wider pool of Sydney first home buyers.
Who Is Eligible for the First Home Guarantee in NSW?
To qualify for the First Home Guarantee as a NSW buyer in 2026, you must meet the following criteria:
- Be an Australian citizen or permanent resident (New Zealand citizens with a Special Category Visa are also eligible)
- Be a genuine first home buyer — you must not have previously owned a residential property in Australia
- Be purchasing a property you intend to live in as your primary place of residence
- Purchase a property within the relevant price cap for your area
- Have a deposit of at least 5% of the purchase price (genuine savings)
- Apply through a participating lender — the guarantee is not available via all lenders
💡 Who Can Apply Together?
Two or more people can apply jointly. From October 2025, this includes non-couples — friends, siblings, or parent and adult child combinations can now apply together. Previously, joint applications were limited to couples.
People who previously owned a property but no longer own one are generally not eligible. However, if you have never owned a residential property in Australia — including investment properties — you may still qualify even if a previous partner owned a property without you.
Property Price Caps in NSW for 2026
The property price cap determines the maximum purchase price eligible for the guarantee. In NSW, the cap has been raised significantly from October 2025:
| Location | Price Cap (2025–26) |
|---|---|
| Sydney metro (Greater Sydney) | $1,500,000 |
| Regional NSW | $800,000 |
The $1.5M Sydney cap is a significant increase that opens up a much larger proportion of the Sydney property market. It now covers most houses in Western Sydney, the Hills District, and inner-ring suburbs that were previously out of reach for scheme applicants. Even some Inner West and Lower North Shore properties are now eligible.
It is worth noting that the property price cap refers to the purchase price, not the loan amount. Your 5% deposit plus any additional savings still need to cover the full purchase price minus your loan amount.
How Does the 5% Deposit Work in Practice?
Here is a practical example to illustrate how the First Home Guarantee works for a Sydney buyer in 2026:
| Without Scheme | With First Home Guarantee | |
|---|---|---|
| Property price | $850,000 | $850,000 |
| Required deposit | $170,000 (20%) | $42,500 (5%) |
| LMI payable | Nil (at 20%) | Nil (waived by scheme) |
| Loan amount | $680,000 | $807,500 |
| Upfront savings needed | $170,000 + costs | $42,500 + costs |
The difference in deposit required is $127,500 — money that a first home buyer can now use elsewhere, or simply doesn't need to have saved. This is why the scheme dramatically accelerates the timeline to homeownership for most Sydney first home buyers.
Note that stamp duty is payable separately and is not covered by the First Home Guarantee. NSW first home buyers are exempt from stamp duty on properties up to $800,000. Use our Stamp Duty Calculator to calculate your exact liability.
How to Apply for the First Home Guarantee in NSW
The First Home Guarantee is not applied for directly through the federal government. Instead, you apply through a participating lender — and a mortgage broker can identify which participating lenders offer the best rates and terms for your situation.
The application process works as follows:
- Check eligibility: Confirm you meet all criteria above. A specialist first home buyer mortgage broker can assess this in minutes.
- Choose a participating lender: Not all lenders participate in the scheme. Your broker will identify which participating lenders have the best rates, features, and turnaround times for your situation.
- Prepare your documents: Payslips, tax returns, 3-6 months' bank statements showing genuine savings, identity documents, and First Home Buyer declaration form.
- Apply for pre-approval: Your broker submits the application, flagging First Home Guarantee eligibility. Places are allocated at the time of formal approval.
- Find your property: Pre-approval is valid for 3–6 months with most lenders.
- Formal approval and settlement: Once you have exchanged contracts, your broker coordinates the formal approval and settlement process.
⚡ Places Are Limited — Act Now
The First Home Guarantee has a set number of places per financial year. In previous years, places have been exhausted before 30 June. The 2025–26 year runs until 30 June 2026. Applying early in the year significantly improves your chances of securing a place.
First Home Guarantee vs. Other NSW First Home Buyer Schemes
The First Home Guarantee is one of several schemes available to first home buyers in NSW in 2026. Here is how they compare:
| Scheme | Benefit | Key Eligibility |
|---|---|---|
| First Home Guarantee | 5% deposit, no LMI | First home buyer, genuine savings |
| NSW First Home Owner Grant (FHOG) | $10,000 cash grant | New/substantially renovated home only |
| NSW Stamp Duty Exemption | Stamp duty waived | Property ≤$800,000 |
| NSW Stamp Duty Concession | Reduced stamp duty | Property $800,001–$1,000,000 |
The most powerful combination for a Sydney first home buyer in 2026 is using the First Home Guarantee (5% deposit, no LMI) alongside the NSW Stamp Duty Exemption for properties under $800,000. On an $800,000 property, this combination saves approximately $31,000 in LMI plus $31,335 in stamp duty — a combined saving of over $62,000.
For current FHOG eligibility and stamp duty thresholds, refer to the Revenue NSW First Home Buyer page and the Housing Australia First Home Guarantee page.
Why Use a Mortgage Broker for Your First Home Guarantee Application?
While you can apply for the First Home Guarantee directly through a participating bank, using a Sydney mortgage broker gives you several meaningful advantages:
- Access to all participating lenders: Your broker compares rates and features across every participating lender — not just one bank's products.
- Scheme eligibility check: A broker confirms your eligibility before you apply, avoiding wasted applications and credit enquiries.
- Combine with other entitlements: Your broker identifies all applicable grants, exemptions, and concessions and ensures nothing is missed.
- Application management: Your broker handles all paperwork and lender communications, reducing stress and errors.
- Speed: Experienced brokers with lender relationships can often accelerate approvals, which matters when scheme places are limited.
- It's free: Mortgage broker services for first home buyers are entirely free — the lender pays the broker's commission.
You can also use our Borrowing Power Calculator and Stamp Duty Calculator to estimate your position before speaking with a broker.
For more information on home loan options across New South Wales, visit our partners at Home Loans Hub for additional first home buyer guides and rate comparisons.
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📅 Book a Free Call Get in Touch →Frequently Asked Questions
Yes. From 1 October 2025, income limits for the First Home Guarantee were completely removed. The previous limits of $125,000 for singles and $200,000 for couples no longer apply. Any eligible first home buyer can now access the scheme regardless of their income.
The property price cap for Greater Sydney in 2025–26 is $1,500,000. This is a significant increase from the previous $900,000 cap and covers a much wider range of Sydney properties, including most houses in Western Sydney, the Hills District, and many inner-city suburbs.
No. The First Home Guarantee is only available for properties you intend to live in as your primary place of residence. Investment properties are not eligible.
The government allocates a fixed number of places each financial year. In recent years, places have sold out before 30 June. For the 2025–26 year, Housing Australia manages the allocation. Applying early in the financial year gives you the best chance of securing a place. Your mortgage broker can advise on availability.
Yes — and this is the most powerful combination available to Sydney first home buyers in 2026. Using both schemes on an eligible property under $800,000 could save you over $60,000 compared to purchasing without either entitlement. Your broker will help you stack every applicable benefit.
If the property exceeds the $1.5M price cap, you cannot use the First Home Guarantee for that purchase. You would need either a 20% deposit to avoid LMI, or pay LMI on a smaller deposit. Our LMI Calculator can estimate the cost if you are in this situation.