Helping first home buyers purchase a home with just a 5% deposit and no LMI
What is the Home Guarantee Scheme?
The Home Guarantee Scheme (HGS) is an Australian Government initiative designed to help eligible first home buyers enter the property market sooner with a lower deposit. Through the First Home Buyer Guarantee Scheme (also known as the First Home Guarantee), the government guarantees a portion of your home loan, allowing you to purchase a property with as little as a 5% deposit, without paying Lenders Mortgage Insurance (LMI).
For many Australians, saving a 20% deposit is the biggest hurdle to homeownership. The First Home Loan Deposit Scheme removes that barrier by enabling approved lenders to offer low-deposit home loans backed by a government guarantee.
Beginning 1 October under recent updates, the scheme expanded to support more buyers, making it one of the most accessible first home buyer schemes currently available in Victoria.
Key Features of the Expanded Home Guarantee Scheme
From higher property price caps to lower deposit requirements, the expanded First Home Buyers Guarantee Scheme opens the door for more Australians to secure their first home sooner.
Removal of Caps and Income Limits
Unlike earlier versions of the first home buyer guarantee, which capped placements at 50,000 per year, the expanded Home Guarantee Scheme introduced unlimited placements and removed income restrictions.
This change has made the home buyer scheme more accessible to a broader range of Australians, particularly dual-income households who previously exceeded income thresholds.
Adjusted Eligible Property Prices
The eligibility criteria for property prices have been updated to reflect current average house prices in metropolitan areas, ensuring it remains accessible to a wider range of prospective homeowners. The property price cap for Melbourne and Geelong will move to $950,000 from 1st October.
Deposit Requirements
Eligible first home buyers can now purchase a property with a deposit as low as 5%. This substantial reduction in deposit requirements allows many Australians to secure their dream home much sooner than previously possible.
Benefits of the Home Guarantee Scheme
The expanded First Home Owners Scheme options available in Victoria reduce barriers to homeownership while supporting stability in the building industry.
Greater financial flexibility
By lowering the deposit requirement to just 5% and removing the need for LMI, the government guarantee gives first home buyers more freedom to enter the property market sooner.
Boost to Home Building Confidence
This expansion provides builders and developers greater confidence in the market, knowing there will be a sustained demand for new homes due to the increased participation in the scheme.
Support from Carlisle Homes
At Carlisle Homes, we’re committed to helping you navigate the home buying process. Our expert team will guide you on how to leverage Government initiatives such as the Home Guarantee Scheme and the Help to Buy Scheme to secure the best options for your future home.
Eligibility criteria for the Home Guarantee Scheme
To qualify for the First Home Guarantee Scheme, applicants must meet certain criteria set by the Australian Government. These requirements ensure the scheme supports genuine first home buyers and families entering the property market.
Residency and citizenship
You must be an Australian citizen or permanent resident, usually at least 18 years of age at the time of application and apply as an individual or couple (depending on scheme rules).
First home buyer status
The scheme is generally limited to people purchasing their first home, although some exceptions may apply for those who have not owned a property in several years.
Property and location rules
The property must fall within the set price caps for Victoria, which differ between metropolitan Melbourne and regional areas, and be the intended primary place of residence.
Deposit requirements
To qualify for the government guarantee, applicants need to save a minimum 5% deposit but no more than 20%.
How to Apply for the Home Guarantee Scheme
Applying for the Home Guarantee Scheme is a straightforward process that allows eligible home buyers to access support in purchasing their first home with a minimal deposit.
01
Check Your Eligibility
Review the updated eligibility criteria set by the Australian Government, including income limits, property price caps, and first home buyer requirements.
02
Gather Documentation
Prepare key documents such as proof of identity, income evidence, savings history, and details of the property you wish to purchase.
03
Contact a Participating Lender
Approach a lender approved under the Home Guarantee Scheme to discuss your home loan options and confirm your eligibility.
04
Submit Your Application
Work with your chosen lender to lodge your home loan and First Home Guarantee Scheme application together.
05
Receive Approval and Secure Your Home
Once your application is approved, you can proceed to finalise your home purchase and celebrate the start of your journey as a homeowner.
How to Apply for the Home Guarantee Scheme
Applying for the Home Guarantee Scheme is a straightforward process that allows eligible home buyers to access support in purchasing their first home with a minimal deposit.
01
Check Your Eligibility
Review the updated eligibility criteria set by the Australian Government, including income limits, property price caps, and first home buyer requirements.
02
Gather Documentation
Prepare key documents such as proof of identity, income evidence, savings history, and details of the property you wish to purchase.
03
Contact a Participating Lender
Approach a lender approved under the Home Guarantee Scheme to discuss your home loan options and confirm your eligibility.
04
Submit Your Application
Work with your chosen lender to lodge your home loan and First Home Guarantee Scheme application together.
05
Receive Approval and Secure Your Home
Once your application is approved, you can proceed to finalise your home purchase and celebrate the start of your journey as a homeowner.
What is the Victorian First Home Owner Grant (FHOG)?
The Victorian First Home Owner Grant (FHOG) is a separate state government initiative that provides a $10,000 one-off payment for eligible first home buyers building or purchasing a new home valued up to $750,000, excluding the cost of land. The grant can be used alongside the First Home Buyer Guarantee Scheme, reducing upfront costs and making new home construction more accessible. For buyers building their first home, combining the First Home Owner Grant with the 5% deposit scheme allows them to enter the market with significantly less savings, while maintaining full ownership of the property.
What is the Help to Buy Scheme?
The Help to Buy Scheme is a shared equity program in which the Australian Government contributes up to 40% toward new homes or up to 30% toward existing homes. Buyers contribute a minimum 2% deposit and obtain a home loan from a participating lender. The Government’s contribution is interest-free and generally eliminates the need for Lenders Mortgage Insurance.
Under the shared equity arrangement, buyers legally own 100% of the property title, but the Government retains a proportional financial interest based on the support provided. No monthly repayments are required to the Government, but buyers can choose to buy back the Government’s share gradually or in full over time. This allows first home buyers with stable income but limited savings to purchase sooner and access homes beyond what they could afford independently. When the property is sold or the equity share is fully bought back, the Government receives the value of its share at that time.
What documents are required?
Proof of identity
e.g., driver's licence or passport
Evidence of income
e.g., payslips, tax returns
Information about the property
you intend to purchase or build
Does the Home Guarantee Scheme differ for regional areas?
The scheme includes a Regional First Home Buyer Guarantee that applies specifically to buyers in regional Victoria. Property price caps are set lower than in metropolitan Melbourne to reflect local market conditions, making it easier for regional residents to purchase a home.
To qualify, applicants generally need to show they’ve lived in the regional area or an adjacent location for at least 12 months. This ensures the guarantee supports local communities and helps more Victorians achieve homeownership outside the city.
- Regional buyers can access a broader range of property types, including house and land packages that may be less available in metropolitan areas.
- Eligible applicants may benefit from faster approval times, as demand in regional Victoria is typically lower than in city markets.
- The scheme is designed to reduce housing pressures in metro Melbourne by encouraging more first home buyers to purchase in regional centres.
Why Choose Carlisle Homes?
At Carlisle Homes, we understand that buying your first home can be overwhelming. Our team of experts is dedicated to supporting you throughout your journey. We have extensive knowledge of the Home Guarantee Scheme, First Home Owner Grant, Help to Buy Scheme and the current housing market, enabling us to provide you with tailored advice to help you make informed decisions.
We offer a diverse range of beautifully designed homes that cater to various lifestyles and budgets. Our commitment to customer satisfaction means we will work tirelessly to help you find the ideal home.
Get Started with Carlisle Homes Today!
Are you ready to take the first step towards homeownership? With the expanded First Home Buyer Guarantee Scheme, the 5% deposit scheme, the FHOG, and the Help to Buy Scheme, there has never been a better time to take your first step toward homeownership in Victoria. Contact Carlisle Homes today to explore your options and start your journey toward owning your first home.
Frequently Asked Questions (FAQs)
Can I use the Home Guarantee Scheme for new builds?
Yes, the scheme is applicable for purchasing both new homes and established properties, including off-the-plan purchases.
What should I know about the changes to eligibility?
The recent changes mean there are now no caps on the number of placements available, and there are no income limits, making it easier for more Australians to benefit from the scheme.
What happens if my financial situation changes after applying?
If your financial situation changes, for example, a reduction in income or job loss, it could affect your ability to meet loan serviceability requirements. It’s essential to inform your lender immediately, as they can reassess your application and provide guidance on the next steps. In some cases, additional documentation may be required to demonstrate your financial position. Early communication with your lender helps avoid delays or potential withdrawal of your application under the Home Guarantee Scheme. You can also make use of our first home buying calculator to ensure you’re in the best position for homeownership.
Can single parents access the Home Guarantee Scheme?
Yes, supporting single parents is one of the core aims of the First Home Buyer Guarantee Scheme. The scheme allows eligible single parents to buy a home with a reduced deposit, helping them overcome one of the biggest barriers to homeownership. By removing the need for Lenders Mortgage Insurance, it provides a more affordable pathway into the property market. This makes the scheme especially valuable for families who may otherwise struggle to save the traditional 20% deposit.
Get Started with Carlisle Homes Today!
With the expanded Home Guarantee Scheme now available, there’s never been a better time to step into homeownership. Contact Carlisle Homes today and let our team guide you in turning your first home dream into reality.
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