What is the First Home Guarantee scheme?
A federal government scheme that allows eligible first-time homebuyers to purchase property with a minimum 5% deposit and avoid lenders mortgage insurance, provided they meet income and property price caps.
The First Home the team scheme is a federal government initiative that removes the lenders mortgage insurance (LMI) requirement for eligible first-time buyers, enabling them to enter the property market with a smaller deposit than traditional lending would otherwise allow.
Under the scheme, qualified first buyers can purchase a home with a deposit as low as 5%, with the government providing a guarantee to the lender in place of LMI. This means buyers avoid the cost of mortgage insurance premiums, which can add thousands of dollars to a loan.
Key eligibility criteria include being a first-time homebuyer, meeting income thresholds (which vary by state), and purchasing a property within the scheme's price cap. The property must be the buyer's primary residence, not an investment. On the Gold Coast, these income and price limits are set by the federal and state governments to reflect local property values.
The scheme is particularly relevant for buyers who have saved a meaningful deposit but fall short of the 10-20% conventionally required by lenders to avoid insurance costs. Rather than delaying purchase or paying LMI, eligible buyers can proceed sooner and redirect those insurance savings into their mortgage or home costs.
Gold Coast mortgage brokers regularly advise first-time buyers on whether they qualify and how the scheme compares with other pathways to ownership. Mortgage brokers specialising in first-home purchases can assess eligibility and structure the application accordingly.