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First Home Guarantee Scheme – A Guide for First Home Buyers

Buying your first home is one of life’s biggest milestones — but it can also be one of the most overwhelming. Between rising property prices, saving a deposit, and navigating loan options, it can feel like the odds are stacked against you. The First Home Guarantee (FHBG) Scheme is designed to support eligible Australians into home ownership sooner, allowing you to purchase a home with as little as a 5% deposit — and without the additional cost of Lenders Mortgage Insurance (LMI). In this guide, we’ll unpack how the scheme works, who’s eligible, what’s changing in the near future, and why it might be smarter to act now rather than wait.

What Is the First Home Guarantee Scheme?

For many Australians, the dream of home ownership can feel just out of reach. Saving a 20% deposit while managing rent and rising living costs can take years. That’s where the First Home Guarantee Scheme (FHBG) steps in — a Federal Government initiative designed to help eligible first home buyers enter the market sooner.

Under the FHBG, Housing Australia guarantees up to 15% of your home loan, meaning you can buy with as little as a 5% deposit and avoid paying Lenders Mortgage Insurance (LMI). This significantly lowers the upfront cost of buying your first home. There are 35,000 places available for FY2024–25, and both individuals and joint applicants can apply.

To qualify, you’ll need to meet the following criteria:

• Be an Australian citizen or permanent resident, aged 18+
• Earn no more than to $125,000 (individuals) or $200,000 (joint applicants)
• Intend to live in the property (owner-occupier)
• Not have owned property in Australia in the past 10 years
• Have between 5–20% deposit (savings or grants may contribute)
• Price caps apply – in WA, that’s $600,000 for homes in Perth and regional centres, and $450,000 for the rest of the state.

At McKinley Plowman, our brokers can determine your eligibility, access lenders participating in the scheme, and help with paperwork and applications — all at no cost to you.

Changes Coming in 2025–26

While the current rules support middle-income first home buyers, major changes are on the horizon. From 1 July 2025, the Federal Government is expected to implement relaxed eligibility criteria as part of its broader housing affordability reforms. What’s changing?

• Removal of income caps – meaning higher-income earners may become eligible.
• Inclusion of more property types and potentially increased price caps in some regions.
• Broader eligibility for past homeowners, allowing more Australians who’ve previously owned property to re-enter the market.

While these changes will open the scheme to more buyers, they’re also expected to increase competition. If you currently meet the income and eligibility criteria, waiting could mean missing out on the more generous current market conditions. WA has long had issues with housing stock, and rising buyer activity in WA’s entry-level price points will only add to this.

Why Now Might Be the Best Time to Act

With only a limited number of spots available under the First Home Guarantee Scheme each year, timing is everything. And right now, buyers who qualify under the existing income limits are in a uniquely advantageous position. Here’s why:

• WA property prices are still comparatively affordable, but supply constraints and population growth are driving competition.
• Once the broader eligibility criteria come into effect, demand will likely spike — and with it, prices.
• You’ll avoid the rush if you qualify now — giving you access to better stock, more choice, and a calmer purchasing environment.
• Interest rates have stabilised, and many economists are tipping further cuts through the rest of 2025. Getting in early may allow you to refinance at better rates down the track.

At McKinley Plowman, we process your application from start to finish. We assess your eligibility, manage the paperwork, and help you understand how to make your deposit work — including combining your savings with grants or incentives where possible.

Rent vs Buy – A Significant Difference Over a Short Time

If you’re currently renting a property around the $600,000 mark, there’s a good chance you’d be better off in time purchasing a home of similar value. This is because rents typically increase year on year, while interest rates at the moment are steady and if anything, coming down. As such, after a relatively short space of time, you’d be financially better off.

Don’t Miss this Window of Opportunity

The First Home Guarantee Scheme has already helped thousands of Australians buy their first home sooner. And for those who act now, the current rules offer a rare chance to get in before prices climb and competition increases. If you’re a first home buyer in WA and want to know if you’re eligible — or if you’re simply curious about how the scheme could work for you — reach out today. The finance team at McKinley Plowman will guide you through the process and help you secure a place under the scheme before they run out. Reach out to us on (08) 9301 2200 or contact us online.

written by:

Paul Moran

Paul has over 35 years of experience in finding financial solutions for homebuyers, investors and business owners.
A licensed broker and member of the Mortgage & Finance Association of Australia (MFAA), Paul’s extensive experience includes 20 years with a major bank, seven of which were as commercial banking manager.
Paul delivers a holistic financial solutions to achieve the best possible outcome for a client’s personal or commercial lending needs. Paul also provides a comprehensive financial consultancy to business owners on commercial, equipment and invoice finance.