First Home Loan Deposit Scheme: Current Rules

The First Home Loan Deposit Scheme is now the Australian Government 5% Deposit Scheme. Its General Stream lets an eligible first home buyer purchase with a 5% deposit and no lenders mortgage insurance (LMI). Housing Australia, the government’s housing agency, guarantees the lender up to 15% of the property’s value instead.

Since 1 October 2025, the scheme has dropped its income caps and its limit on places. Eligibility now turns on separate gates for the applicant, prior ownership, occupancy, the deposit and the property. The participating lender’s own credit assessment then decides whether your client gets the loan.

Current Scheme and Legacy Name

The Australian Government 5% Deposit Scheme replaced the Home Guarantee Scheme name on 1 October 2025. The First Home Guarantee, launched in 2020 as the First Home Loan Deposit Scheme, carried over into the new scheme. Several participating lenders now call that guarantee the General Stream, and Housing Australia’s forms label it “For First Home Buyers”.

Clients and older lender documents still use the earlier names. First Home Guarantee, FHLDS, Home Guarantee Scheme (HGS) and “the 5% deposit scheme” all point to the General Stream when the buyer is a first home buyer. Single parents and legal guardians use the scheme’s second guarantee, which replaced the Family Home Guarantee.

This timeline dates each name, so you can read an older flyer, client email or lender policy against the rules that applied when it was written.

Date	Change	How to read the name today
1 January 2020	First Home Loan Deposit Scheme starts with the major banks, followed by other lenders on 1 February 2020	General Stream
2 November 2020	New Home Guarantee starts for first home buyers building or buying a new home	Closed to new applications on 30 June 2022
1 July 2021	Family Home Guarantee starts for single parents with a 2% deposit	The guarantee for single parents or legal guardians
1 July 2022	First Home Loan Deposit Scheme becomes the First Home Guarantee, and the guarantees sit under the Home Guarantee Scheme banner	General Stream
1 October 2022	Regional First Home Buyer Guarantee starts	Closed to new applicants from 1 October 2025
12 October 2023	The National Housing Finance and Investment Corporation (NHFIC) becomes Housing Australia	Housing Australia runs the scheme
1 October 2025	Home Guarantee Scheme becomes the Australian Government 5% Deposit Scheme	Current scheme name
1 July 2026	Housing Australia issues the current fact sheet, Information Guide and Home Buyer Declaration	Current scheme settings

The early dates come from NHFIC’s 2021-22 scheme trends report and Housing Australia’s 12 October 2023 announcement. In that report, FHG means the Family Home Guarantee, so check which guarantee an older document means before you rely on it.

The 1 October 2025 change did more than rename the scheme. Housing Australia’s scheme FAQ lists the other changes.

• Income caps were removed.
• Property price caps rose in line with average house prices.
• The limit on the number of places was removed.
• The Regional First Home Buyer Guarantee closed to new applicants. Regional buyers now apply as first home buyers or as single parents and legal guardians.

Older news that the First Home Loan Deposit Scheme had reached capacity dates from when the guarantees had a fixed number of places. The FAQ now says places are unlimited for eligible buyers. Any lender material that mentions income caps, waitlists or a separate regional guarantee describes rules that ended on 1 October 2025.

General Stream Eligibility

A first home buyer qualifies for the General Stream only by passing each eligibility gate separately. Housing Australia’s 1 July 2026 Information Guide sets out the gates below, and the participating lender checks each one. A client who clears the deposit gate can still fail on prior ownership or the property.

Applicant

Every applicant must be an Australian citizen or permanent resident, and at least 18, at the Home Loan Date. The Information Guide defines that as the date your client signs the home loan agreement with the participating lender.

A client who has applied for permanent residency but hasn’t received the visa fails this gate. So does a couple where only one partner is a citizen or permanent resident.

Your client can apply alone or with one other person, such as a partner, friend or family member. Both joint applicants must pass every gate, and a loan with three or more borrowers doesn’t qualify. A client in a relationship can still apply alone if they’ll be the only borrower, and the scheme sets no income limit.

Prior Ownership

Neither applicant can have held an interest in Australian property in the 10 years before the Home Loan Date. The test covers freehold land, a lease of land for 50 years or more and a company title interest.

The test counts residential and commercial property, investments and land that was never lived in. It also counts property held with someone else, such as a former partner. The FAQ measures the 10 years from the date the previous property sold.

Housing Australia can check former home ownership against council records and property title information. A client who owned a home 8 years ago fails this gate, even though they haven’t owned property since.

Occupancy

Your client must move in within 6 months of loan settlement. For a new build, the 6 months runs from the issue of the occupancy certificate.

They must keep living in the home while the guarantee is in place, so they can’t rent it out. Existing tenants are allowed at purchase, provided your client moves in within the 6 months. If your client moves out early, the lender can require them to pay LMI.

Deposit

Your client needs savings of at least 5% of the Property Value and less than 20%. Property Value is the participating lender’s valuation, which can differ from the purchase price.

They must put as much of their savings toward the deposit as the lender’s policy allows. A client who has 20% or more left after paying stamp duty and legal fees is outside the scheme. The Information Guide treats moving cash or assets to another person to get under 20% as against the guarantee’s intent.

Property and Loan

The property must be a residential home in Australia. It can be an existing home, a house and land package, vacant land with a separate building contract or an off-the-plan purchase.

Both the purchase price and the Property Value must be at or below the price cap for the property’s location. For vacant land with a separate building contract, the land price plus the build cost must also fit under the cap. A client who already owns vacant land can’t use the scheme for a new loan to build on it.

Your client must be the registered owner at settlement. The loan must be an owner-occupier loan with principal and interest repayments over up to 30 years, plus up to 3 years to build a new home.

These are the price caps in Housing Australia’s 1 July 2026 fact sheet.

State or territory	Capital city and regional centres	Rest of state or territory
New South Wales	$1,500,000	$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
Australian Capital Territory	$1,000,000	$1,000,000 (all areas)
Northern Territory	$750,000	$600,000
Jervis Bay Territory and Norfolk Island	$550,000	$550,000 (all areas)
Christmas Island and Cocos (Keeling) Islands	$400,000	$400,000 (all areas)

The regional centres are the Central Coast, Coffs Harbour-Grafton, Illawarra, Mid North Coast, Richmond-Tweed, Newcastle and Lake Macquarie in New South Wales. Geelong in Victoria and the Gold Coast and Sunshine Coast in Queensland are also regional centres. The price cap page has a postcode search for an exact location.

Participating Lenders and Application

Only a participating lender can apply for the guarantee, so a General Stream application starts with a lender on Housing Australia’s panel. Your client can’t apply to Housing Australia directly. Housing Australia doesn’t assess or approve the home loan either.

The participating lender list includes ANZ, Commonwealth Bank, NAB and Westpac, along with regional banks and customer-owned banks. A broker the lender authorises to help clients apply is a Representative under the Information Guide.

Work through the application in this order.

1. Check every gate with your client, then have each applicant complete their own Home Buyer Declaration on the 1 July 2026 form. Part D is a Commonwealth statutory declaration, and joint applicants can’t witness each other’s. The first home buyer declaration guide explains how to fill it in.
2. Choose the participating lender. Your client can apply with more than one participating lender while searching, but they must choose one before signing a contract of sale.
3. Reserve the place. The lender assesses your client’s eligibility and applies to Housing Australia to reserve a guarantee place, which it holds for 14 days.
4. Complete the application within those 14 days. Expect to supply each applicant’s full name, date of birth, Medicare number (or PMKeyS number), proof of citizenship or permanent residency and the signed declaration. The lender then asks Housing Australia to pre-approve the place.
5. Finish the credit assessment. Once the place is pre-approved, your client has 90 days to find a home and sign a contract. The lender still approves the loan under its own credit policy, as in any home loan pre-approval.
6. Sign the contract and get final approval. The lender values the property to set the Property Value, checks it and the price against the cap and manages the final approval.
7. Settle and move in. Your client must be the registered owner at settlement and move in within 6 months. For a new build, keep the building contract, construction progress and occupancy certificate for the lender.

The scheme’s Information Guide sets no rule for genuine savings or gifted deposits, so each lender’s policy decides them. Bulma’s Policy Advisor answers questions like these across 52+ lenders and quotes the policy wording, which you can keep in your client’s file notes.

Deposit and LMI Treatment

The government guarantee covers the lender for up to 15% of the Property Value. That bridges the gap between a 5% deposit and the 20% deposit a lender usually needs to lend without LMI, so an eligible buyer pays no LMI. The exact guarantee amount is set during the application from the loan amount and the Property Value.

The guarantee protects the lender, not your client. Housing Australia pays the lender only after a default, the sale of the home and a shortfall left once the sale proceeds are applied. It doesn’t cover missed repayments or stop the lender enforcing the loan.

Your client still pays the deposit, stamp duty, legal fees and every repayment, but Housing Australia charges no fee for the scheme. The first home buyer stamp duty guide shows how state concessions reduce the duty.

In this hypothetical example, a first home buyer signs a $900,000 contract for a house in Geelong. Geelong is a Victorian regional centre with a $950,000 cap. The lender’s property valuation puts the house at $880,000, which becomes the Property Value.

Item	Amount	Basis
Contract price	$900,000	Under the $950,000 cap
Property Value	$880,000	The lender’s valuation, also under the cap
Minimum deposit	$44,000	5% of the Property Value
Largest loan	$836,000	95% of the Property Value
Client’s share of the price	$64,000	The $900,000 price less the $836,000 loan
Guarantee limit	Up to $132,000	15% of the Property Value

The low valuation lifts your client’s share of the price from $45,000 to $64,000, before stamp duty and other costs. If the valuation had come in at $960,000 instead, the house would fail the cap test, because the Property Value would exceed $950,000. Your client also needs less than $176,000, or 20% of the Property Value, left after costs to stay in the scheme.

The guarantee stays in place until one of these events happens.

• The loan’s scheduled balance falls to 80% or less of the Property Value. Extra repayments that can be redrawn don’t count.
• Your client refinances with a lender outside the panel or repays the loan in full.
• The participating lender lends more against the property.
• Your client sells the home, rents it out or stops living in it without an exemption.
• The loan turns out never to have been eligible.

If the guarantee ends while the loan-to-value ratio (LVR) is still above 80%, the lender can charge LMI or other costs. Your client can refinance to another participating lender and keep the guarantee, provided they don’t increase the loan or extend its term.

Lender approval stays separate from the guarantee. Housing Australia’s Home Buyer Declaration says a client can be eligible under the scheme and still not get a loan if they don’t meet the lender’s criteria. The lender’s assessment sets the loan amount, which the loan serviceability guide explains.

Compare Other Routes

The 5% Deposit Scheme is the first route to check for a first home buyer with a small deposit who passes every gate. It removes LMI without a guarantor or a government share in the home. When a gate fails, compare the routes below, which rest on different support.

A professional LMI waiver is a lender’s own policy for borrowers in listed occupations. The scheme’s first home, price cap and occupancy tests don’t apply, and each lender sets its own profession list and conditions, which the LMI waiver guide covers.

A family guarantee uses a relative’s property as extra security for the loan. No government support is involved, and the relative’s property is at risk if your client defaults. The home loan guarantor guide covers who can act as guarantor.

The Help to Buy Scheme is a shared equity scheme with income limits that starts from a 2% deposit. The government contributes up to 30% of the price of an existing home or 40% of a new one in exchange for a share in the home. The Information Guide says the two schemes can’t be used together, and the Help to Buy guide explains who qualifies.

The guarantee doesn’t stop your client using a state or territory grant or stamp duty concession, which each set their own rules. The first home owner grant guide covers the grants by state.

A single parent or legal guardian applies under the scheme’s second guarantee, with a 2% minimum deposit and a guarantee of up to 18%. The lender still assesses their whole household, as the single parent home loan guide explains.

Application Timing and Settlement Delays

A General Stream application runs on fixed clocks, and the Home Loan Date anchors them. The eligibility tests apply at that date, when your client signs the loan agreement. The Information Guide says the contract, settlement and move-in timeframes can’t be changed.

Stage	Deadline
Reserved place	Held for 14 days while the application is completed
Pre-approved place	90 days to find a home and sign a contract of sale
Land purchase	The land must be titled before the guarantee is issued, within the 90-day pre-approval period
Off-the-plan purchase	Contract signed before loan settlement, and settlement within 90 days of the Home Loan Date
Separate building contract	Signed within 6 months of loan settlement
Construction	Started within 12 months and finished within 36 months of loan settlement
Moving in	Within 6 months of settlement, or of the occupancy certificate for a new build

The Information Guide publishes no extension for the 14-day hold or the 90-day pre-approval period. The participating lender submits and manages the reservation, so only the lender can resubmit it. Because places are unlimited, a new reservation doesn’t send your client to the back of a queue.

Escalate a missing document or a delay in this order.

1. Collect the declaration, identity details and citizenship or residency proof before the lender reserves the place. The 14-day hold then goes on the application, not on chasing documents.
2. Tell the lender’s business development manager (BDM) or scheme contact the day you know a document will be late. Ask whether the lender will resubmit the reservation once the document arrives.
3. If your client hasn’t signed a contract as day 90 approaches, raise it with the lender before the period ends. Without a signed contract by day 90, your client needs a new pre-approval through the lender.
4. For land that isn’t titled yet, confirm the expected title date with the seller’s conveyancer before your client signs. Title registration after the 90-day period means the guarantee can’t be issued on the current pre-approval.
5. For an off-the-plan purchase, ask the lender to time the loan agreement against the developer’s expected completion. Tell the lender as soon as the developer flags a delay, because settlement must fall within 90 days of the Home Loan Date.
6. For a new build, give the lender the building contract within 6 months of settlement and report any builder delay before the 12-month start or 36-month finish deadline.
7. If the guarantee can’t be issued or is lost, the lender can ask for LMI or a larger deposit. Compare the routes above, and use the lender’s complaints process and then the Australian Financial Complaints Authority (AFCA) for a dispute.

Run the gates and the clocks before your client signs a contract, and you’ll know whether the General Stream fits their purchase or another route does.