Buying with a 5 percent deposit and skipping Lenders Mortgage Insurance sounds too good to be true, but for eligible Queensland buyers, that’s exactly what the First Home Guarantee Scheme does. This guide breaks down how it actually works, who qualifies, what the current QLD price caps are, and how it fits alongside the Queensland First Home Owner Grant and stamp duty concessions.

What the First Home Guarantee Scheme Is

The First Home Guarantee, formerly known as the First Home Loan Deposit Scheme, is an Australian Government scheme administered by Housing Australia. It lets eligible first home buyers purchase a property with as little as a 5 percent deposit, without paying LMI.

  • It’s not a cash payment or a grant, it’s a guarantee
  • The government guarantees up to 15 percent of the property’s value to your lender
  • This effectively means your lender treats the loan as if you’d put down a full 20 percent deposit, which is why LMI isn’t charged
  • You still need genuine savings for your 5 percent deposit and standard purchase costs

Who Is Eligible

Eligibility rules changed significantly from 1 October 2025, and a lot of information still circulating online reflects the older, more restrictive version of the scheme.

  • You must be an Australian citizen or permanent resident
  • You must be a genuine first home buyer, generally meaning you haven’t previously owned property in Australia
  • You must be 18 or older
  • You must intend to live in the property as your principal place of residence, not purchase it as an investment
  • Income caps were removed from 1 October 2025, so there’s no longer an income test excluding higher earners
  • Couples applying jointly generally need to be married or in a de facto relationship, friends or siblings buying together don’t currently qualify under this joint pathway

How the Scheme Actually Works

Understanding the guarantee mechanism helps explain why this scheme can save buyers a genuinely significant amount compared to a standard low-deposit loan.

  • You save a 5 percent deposit rather than the usual 20 percent
  • The government guarantees the gap, up to 15 percent of the property value, directly to your lender
  • Because the lender’s risk is reduced, they don’t require LMI, which can otherwise cost thousands of dollars depending on your loan size
  • Annual place limits were also removed from 1 October 2025, previously the scheme was capped at roughly 35,000 places a year, which meant places could run out. That cap no longer applies

QLD Property Price Caps

The scheme only applies below certain property price thresholds, and these caps were increased significantly from 1 October 2025.

  • Brisbane, Gold Coast, and Sunshine Coast: $1,000,000
  • Regional Queensland (elsewhere in the state): $700,000

These caps are reviewed periodically by Housing Australia, so it’s worth confirming the current figure before you sign a contract, particularly if your purchase price sits close to the threshold.

The Regional First Home Buyer Guarantee for Sunshine Coast and Regional QLD Buyers

Alongside the standard First Home Guarantee, there’s a related scheme called the Regional First Home Buyer Guarantee, aimed specifically at buyers purchasing in designated regional areas.

  • It generally requires you to have lived in the regional area you’re buying in for the past 12 months
  • It operates with its own set of guarantee places, separate to the standard scheme
  • Whether a specific Sunshine Coast postcode is classified as “regional” for this particular scheme, as opposed to falling under the standard scheme’s shared metro-tier price cap, isn’t something we’d assume either way without checking, since it depends on the exact area classification used by Housing Australia
  • We confirm which pathway, standard or regional, actually applies to your specific address before you proceed

How the Scheme Works Alongside the QLD First Home Owner Grant and Stamp Duty Concessions

Queensland first home buyers can often combine several forms of support, since each scheme is administered separately.

  • QLD First Home Owner Grant. Currently $15,000 for eligible new home contracts, following the reversion from the temporary $30,000 boosted rate that applied to contracts signed by 30 June 2026
  • QLD transfer duty exemption. From 1 May 2025, eligible first home buyers pay zero transfer duty on new homes and vacant land, with no price cap. Established homes get a full exemption up to $700,000, and a partial exemption up to $800,000
  • Combining schemes. The First Home Guarantee, the FHOG, and the transfer duty exemption can generally be combined, but each has its own eligibility rules, and applying in the wrong order can cause complications

Participating Lenders and How to Apply

You can’t apply for the First Home Guarantee directly through Housing Australia.

  • Applications go through a participating lender or a broker with access to the scheme
  • Not every lender on the market offers the guarantee, so it’s worth confirming which lenders in our panel currently participate before comparing rates
  • The application process includes proof of identity, income verification, and a signed statutory declaration confirming your eligibility
  • Because places are no longer capped, there’s less urgency around securing a “place” than there used to be, though price caps and eligibility rules can still change

Common Mistakes and Traps to Watch For

A few mistakes come up regularly with buyers researching this scheme on their own.

  • Assuming an income cap still applies, based on outdated information from before the October 2025 changes
  • Not confirming which lenders on your shortlist actually offer the guarantee before comparing rates
  • Assuming friends or siblings buying together qualify for a joint application under this pathway
  • Overlooking whether a specific address is genuinely eligible for the regional pathway or the standard pathway
  • Not accounting for the fact that price caps and scheme rules are reviewed periodically and can change

FAQs

Is the First Home Guarantee the same as the 5% deposit scheme?
Yes, the “5% deposit scheme” is a common informal name for the First Home Guarantee. It’s the same Australian Government scheme, administered by Housing Australia.

Do I still need a 20 percent deposit to avoid LMI under this scheme?
No, that’s the entire point of the scheme. With an eligible 5 percent deposit, the government guarantee removes the need for LMI, which normally applies to any deposit below 20 percent.

Can I use the First Home Guarantee for an investment property?
No, the scheme requires you to live in the property as your principal place of residence. It’s not available for investment purchases.

Are there still limited places available under the scheme?
No, annual place limits were removed from 1 October 2025. Previously the scheme was capped at around 35,000 places a year, but that restriction no longer applies.

Book a Pre-Approval Call With ADA

Want to know exactly where you stand under the First Home Guarantee? Book a free 30 minute call and we’ll check your eligibility, confirm your borrowing capacity, and get pre-approval sorted with a participating lender.

Looking specifically in the Coolum Beach area? Our Coolum Beach mortgage broker page covers local lending options too.

Book a Free Consultation Contact Us

This is general information only and does not constitute financial or credit advice. Scheme rules, price caps, and eligibility criteria can change, always confirm current details with Housing Australia or speak to a licensed broker for advice tailored to your situation.