First Home Guarantee Update : What It Means for Buyers (From a Broker’s Perspective)

Big news for First home buyers today! The Federal Government has updated the First Home Guarantee (FHG), and as a mortgage broker, I want to break down what it really means for you and your journey as a first home buyer.

What’s Changed?

1. Buy With Just 5% Deposit (No LMI)- The FHG now lets eligible first home buyers secure a home with only a 5% deposit, without paying lenders mortgage insurance (LMI). That’s huge if you’ve been saving but are still short of the typical 20% deposit. From a broker’s point of view, this can make homeownership more achievable, sooner and save you money.

   
   

2. Unlimited Places – More Access, But Watch the Demand- Previously, only a limited number of buyers could use the FHG each year. Now, it’s unlimited. Great news for buyers, but as a broker, I’ve seen how removing caps can sometimes increase competition for properties. It might push prices up in popular areas, so timing and strategy matter.

   
   

3. Higher Property Price Caps- Property price caps have been raised to reflect regional and metro markets. This means more homes are eligible for the scheme. From my experience, it’s important to check whether your dream property falls within the cap, sometimes even a small price difference can affect eligibility.

   
   

4. Expanded Eligibility Criteria- If you haven’t owned a home in the past 10 years and are a citizen or permanent resident, you can apply. Brokers like me are also looking at your broader financial picture; genuine savings, current debts, and repayment capacity to ensure this scheme really works for you.

   
   

   What This Means for You

   
   

As a broker, my role isn’t just about securing you a loan; it’s about helping you make smart decisions. Here’s what you need to consider with this update:

• Your Budget Matters More Than Ever- Even with a 5% deposit, your ongoing repayments need to fit comfortably into your lifestyle. Interest rates can fluctuate, so planning for a buffer is key.

  
  

• Don’t Let the Guarantee Make You Complacent- It’s tempting to jump straight in because the deposit requirement is low, but the housing market is competitive. I advise clients to consider location, long-term growth, and affordability, not just what they can borrow today.

  
  

• Professional Advice is Gold- This update makes it easier to access government support, but navigating lenders, loan types, and eligibility can be confusing. That’s where a broker adds real value—we can help you compare options, structure your loan wisely, and guide you through the application process.

  
  

Key Takeaways

1. The FHG is now more accessible than ever.

2. There’s a real opportunity to get into the market sooner with a small deposit.

3. Careful planning is still essential—don’t rush in.

4. A mortgage broker can save time, stress, and money by guiding you through the process.

   
   

If you’re a first-time buyer and wondering whether this new update could work for you, don’t hesitate to reach out. I can help you figure out what you qualify for, what you can comfortably afford, and the smartest way to use the guarantee to your advantage.

Some resources for further information:

News on the update

Government announcement

First home buyers info