First Home Guarantee 2026: No Income Caps, Unlimited Places and How a Mortgage Broker Can Help

Buying your first home in Australia has never been more complex — or more supported. The First Home Guarantee (FHBG), administered by Housing Australia, was significantly overhauled from 1 October 2025, removing income caps, eliminating annual place limits, and raising property price thresholds across every state and territory. For first home buyers navigating these changes in 2026, an experienced mortgage broker is the single most valuable ally you can have.

What Is the First Home Guarantee?

The First Home Guarantee is a federal government scheme that allows eligible first home buyers to purchase a property with a deposit as low as 5% without paying Lenders Mortgage Insurance (LMI). Instead of the buyer paying LMI — which can add tens of thousands of dollars to the cost of a loan — the government guarantees the shortfall between the buyer''s deposit and the standard 20% threshold required by lenders.

The scheme is administered by Housing Australia and accessed exclusively through participating lenders and accredited mortgage brokers. You cannot apply directly through the government; your broker or lender submits the guarantee request on your behalf as part of the home loan application process.

Since its inception, the FHBG has helped hundreds of thousands of Australians enter the property market earlier than they otherwise could. The 2025–26 reforms make it more accessible than ever before.

Key Changes Effective October 2025

The October 2025 overhaul introduced three landmark changes that fundamentally reshape who can access the scheme and how quickly they can do so.

Income Caps Abolished

Previously, singles earning more than $125,000 per year and couples earning more than $200,000 combined were ineligible for the FHBG. Those thresholds have been completely removed. In 2026, there is no income limit — any Australian citizen or permanent resident who meets the other eligibility criteria can apply, regardless of their salary.

Unlimited Places

The former annual cap of 35,000 places created a competitive scramble, with many eligible buyers missing out simply because the quota was exhausted. That cap no longer exists. All eligible applicants can now access the guarantee without competing for a limited number of spots, removing one of the most frustrating barriers to entry.

Higher Property Price Caps

Maximum property values have been substantially increased to reflect current market conditions. In New South Wales, the cap for Sydney and major regional centres is now $1,500,000. Victoria''s cap sits at $1,300,000 for Melbourne and major regional areas.

Queensland''s cap is $1,000,000 for Brisbane and major regional centres, while Western Australia and South Australia are capped at $900,000 for capital cities. Tasmania and the Northern Territory are capped at $750,000 for capital cities.

Regional buyers also benefit from separate, lower caps that still represent a significant increase on previous thresholds. The former Regional First Home Buyer Guarantee has been consolidated into the main FHBG, simplifying the process for buyers outside capital cities.

Who Is Eligible in 2026?

Despite the removal of income caps, several eligibility criteria remain in place. Understanding these requirements before you begin your property search is essential — and a mortgage broker can assess your eligibility quickly and accurately.

• Australian citizen or permanent resident — Temporary visa holders are not eligible for the FHBG.
• Aged 18 or over — There is no upper age limit.
• First home buyer status — You must not have owned residential property in Australia within the last 10 years. This "Fresh Start" rule applies to all applicants on a joint application.
• Owner-occupier purchase — The property must be purchased as your primary place of residence, not as an investment property.
• Minimum 5% deposit — You must have saved at least 5% of the property''s purchase price as a genuine deposit. Gifted funds may be acceptable depending on the lender''s policy.
• Standard credit and serviceability — You must meet the participating lender''s standard credit assessment and serviceability requirements, including APRA''s 3% serviceability buffer.
• Joint applications — Two eligible buyers may apply together, provided both meet all criteria individually.

The Family Home Guarantee, a related scheme for single parents and legal guardians with at least one dependent, allows for a deposit as low as 2% and remains available alongside the FHBG.

Common Mistakes First Home Buyers Make

Even with a more accessible scheme, first home buyers frequently make avoidable errors that delay or derail their applications. Awareness of these pitfalls can save you significant time and money.

• Assuming all lenders participate — Not every bank or lender is accredited to offer the FHBG. Applying through a non-participating lender means you cannot access the guarantee, even if you are otherwise eligible.
• Overlooking the 10-year ownership rule — Many buyers assume "first home buyer" means they have never owned property anywhere. The actual rule is that you must not have owned residential property in Australia in the last 10 years. Previous ownership more than a decade ago does not disqualify you.
• Confusing the FHBG with the First Home Owner Grant — The FHBG is a loan guarantee, not a cash grant. The First Home Owner Grant (FHOG) is a separate, state-administered cash payment available in some states for new builds. These can often be combined, but they are distinct programs with different eligibility rules.
• Not checking the property price cap for their specific postcode — Price caps vary not just by state but by whether a postcode is classified as a capital city, major regional centre, or rest of state. Buying a property even slightly above the applicable cap disqualifies you from the scheme.
• Applying too late in the purchase process — The guarantee must be reserved before contracts are exchanged. Leaving the application to the last minute risks missing the window, particularly in competitive markets where settlement timelines are tight.
• Underestimating total purchase costs — A 5% deposit covers the loan requirement, but buyers must also budget for stamp duty (unless exempt), conveyancing fees, building and pest inspections, and moving costs. Failing to account for these can leave buyers short at settlement.

Australian Regulatory Context

The First Home Guarantee operates within a broader regulatory framework that mortgage brokers must navigate on your behalf. Housing Australia administers the scheme under the National Housing Finance and Investment Corporation Act 2018, and participating lenders must be approved by Housing Australia to offer FHBG-backed loans.

Mortgage brokers operating in Australia are regulated by the Australian Securities and Investments Commission (ASIC) under the National Consumer Credit Protection Act 2009. Since 2020, brokers have been subject to a statutory Best Interests Duty, which legally requires them to act in the best interests of the borrower — not the lender — when recommending a home loan product. This duty is particularly important when navigating the FHBG, as the choice of participating lender can significantly affect your interest rate, loan features, and long-term costs.

APRA''s serviceability buffer — currently set at 3 percentage points above the loan''s interest rate — applies to all FHBG-backed loans. This means lenders assess your ability to repay the loan at a rate approximately 3% higher than the actual rate offered. A mortgage broker can help you understand how this buffer affects your borrowing capacity and identify lenders whose assessment criteria best suit your financial profile.

The Australian Financial Complaints Authority (AFCA) provides a free dispute resolution service for borrowers who have complaints about their mortgage broker or lender. All ASIC-licensed brokers must be AFCA members.

Questions to Ask Your Mortgage Broker

When meeting with a mortgage broker about the First Home Guarantee, the following questions will help you assess their expertise and ensure you receive the best possible outcome.

1. Which participating lenders do you have accreditation with? — A broker with access to a wide panel of FHBG-approved lenders can compare rates and features across multiple options.
2. What is the property price cap for the suburb I am considering? — Confirm the exact cap for your target postcode before making an offer.
3. Can I combine the FHBG with the First Home Owner Grant or stamp duty exemptions in my state? — Stacking benefits can significantly reduce your upfront costs.
4. How does the APRA serviceability buffer affect my borrowing capacity? — Understanding this helps you set a realistic budget.
5. What documentation do I need to provide to demonstrate genuine savings? — Lenders have specific requirements around deposit evidence, and your broker should guide you through this.
6. How long does the guarantee reservation process take? — Timing is critical in competitive markets, and your broker should have a clear process for reserving your place quickly.
7. What happens if my application is declined by one participating lender? — A good broker will have alternative lenders ready and will not simply give up after one rejection.

How MyMoney® Can Help

Navigating the First Home Guarantee in 2026 requires more than a basic understanding of the scheme — it requires a mortgage broker who is accredited with multiple participating lenders, up to date on the latest price caps and eligibility rules, and legally obligated to act in your best interests.

MyMoney® connects first home buyers with qualified, ASIC-licensed mortgage brokers who specialise in government-backed home loan schemes. Whether you are just starting to save your deposit or ready to make an offer, the right broker can make the difference between securing your first home this year and waiting another 12 months.

Post a Brief on MyMoney® to receive tailored proposals from accredited mortgage brokers in your area, or Browse Mortgage Brokers to compare professionals and find the right match for your first home purchase.