The First Home Guarantee Explained

The First Home Guarantee is a Federal Government initiative that lets eligible first home buyers purchase a property with as little as a 5% deposit — without paying Lenders Mortgage Insurance (LMI). The government effectively guarantees the portion of the loan above 80%, which is what a lender would normally charge LMI to cover.

For many buyers that saving is significant. On a $600,000 purchase, LMI can run into the tens of thousands of dollars, so the guarantee can be the difference between buying now and saving for another two or three years while prices move.

To qualify you generally need to be an Australian citizen or permanent resident aged 18 or over, buying a home to live in, within the property price cap for your region, and you must not have owned property in Australia before (some exceptions apply for people who have not owned in the past 10 years). Income limits also apply.

Places are limited each financial year and are allocated through participating lenders, so timing matters. Not every lender participates, and those that do can have different turnaround times and policies — which is exactly where a broker earns their keep.

At Derwent Finance we check your eligibility, confirm the current price caps for your suburb, reserve a place with a participating lender and stack any state grants or duty concessions on top. Book a free strategy session and we will map out exactly what you qualify for.