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A Guide to the 2025 Home Guarantee Scheme

For many Australians, especially in WA, the dream of owning a home can feel out of reach due to the daunting 20% deposit typically required by lenders. Recognising this challenge, the Australian Government introduced the Home Guarantee Scheme (HGS) to assist eligible homebuyers in entering the property market sooner.

What is the Home Guarantee Scheme?

The Home Guarantee Scheme is an initiative by the Australian Government, administered by Housing Australia, designed to support eligible homebuyers who have saved a small deposit. Under the scheme, the government provides a guarantee to participating lenders, enabling homebuyers to purchase a home with as little as a 5% deposit without the need to pay Lenders Mortgage Insurance (LMI).

Types of Guarantees Available

The HGS comprises three distinct guarantees tailored to different buyer profiles:

  1. First Home Guarantee (FHBG): Assists eligible first-time homebuyers to purchase a home with a deposit as low as 5%, without paying LMI.

  2. Regional First Home Buyer Guarantee (RFHBG): Targets eligible first-time buyers in regional areas, allowing them to buy a home with a 5% deposit and no LMI.

  3. Family Home Guarantee (FHG): Supports eligible single parents or single legal guardians with at least one dependent child to purchase a home with a deposit as low as 2%, without paying LMI .

Eligibility Criteria

To qualify for the Home Guarantee Scheme, applicants must meet specific criteria, which may include:

  • Citizenship: Australian citizens or permanent residents.

  • Age: At least 18 years old.

  • Income: Singles earning up to $125,000 and couples earning up to $200,000 per annum.

  • Property Ownership: Applicants must not have previously owned or had an interest in a property in Australia.

  • Owner-Occupier: The purchased property must be intended for owner-occupation.

It’s important to note that specific eligibility requirements can vary based on the type of guarantee and individual circumstances. Prospective applicants should consult with a participating lender or use the Housing Australia Eligibility Tool to assess their eligibility.

Application Process

  1. Check Eligibility: Use the Housing Australia Eligibility Tool or consult with a participating lender to determine eligibility.

  2. Engage a Participating Lender: Applications must be made through lenders authorized by Housing Australia. These lenders will assess eligibility, guide applicants through the process, and submit the application on their behalf .

  3. Prepare Documentation: Gather necessary documents, including proof of income, identification, and evidence of savings.

  4. Submit Application: Work with the lender to complete and submit the application.

  5. Await Approval: The lender will inform the applicant of the outcome and next steps.

Additional Support in Western Australia

In addition to the federal Home Guarantee Scheme, the Western Australian Government offers further assistance to first homebuyers:

  • First Home Owner Grant (FHOG): A one-off payment of $10,000 for eligible first homebuyers purchasing or building a new home.

  • Stamp Duty Concessions: As of March 2025, increased stamp duty exemptions and concessions are available, potentially saving first homebuyers up to $18,000 .

Final Thoughts

The 2025 Home Guarantee Scheme presents a valuable opportunity for eligible Australians to overcome the financial hurdles of homeownership. By reducing deposit requirements and eliminating LMI costs, the scheme makes purchasing a home more attainable. Prospective buyers in Western Australia should also explore additional state-based incentives to maximize their benefits.

For personalised advice and assistance with the application process, consider consulting with a mortgage broker experienced in navigating these schemes.

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