DRAFT - HGS Frequently Asked Questions

A Guarantee is a legal arrangemenet between Housing Australia and a Participating Lender who provides a home loan under the Home Guarantee Scheme.

A Guarantee protects the Participating Lender, not you. It is not a cash payment to you, or a deposit for your home - you will not receive any funds.

It essentially means that if a home buyer defaults on their home loan, and selling the property doesn't cover the outstandding amount, they owe on their mortgage, then Housing Australia 'guarantees' to pay the lender a shortfall up to a pre-agreed limit.

For the First Home Guarantee and the Regional First Homebuyer Guarantee, the pre-agreed limit is up to 15% of the property value; and for the Family Home Guarantee it is up to 18%. The exact amount is set during the application process and depends on the deposit and the property value when purchased.

The property value is assessed by the Participating Lender, and it may be different to the purchase price. In those situations, please speak to your Participating Lender about what this means for you. 

Home buyers usually need a deposit of 20% of the property value to get a home loan, and those with a smaller deposit may require Lenders Mortgage Insurance (LMI).

Under the Home Guarantee Scheme, Housing Australia provides a Guarantee to the lender, so home buyers only need a 2% or 5% deposit (depending on the type of Guarantee) and don’t need LMI.

This means that you don’t have to keep saving for a larger deposit and can buy a home sooner, with lower upfront costs. 

For FY2025/2026:

• First Home Guarantee - 35,000 places
• Family Home Guarantee - 5,000 places
• Regional First Home Buyer Guarantee - 10,000 places.

You need to save a minimum deposit of 5% of the property value for the First Home Guarantee or Regional First Home Buyer Guarantee, and 2% of the property value for the Family Home Guarantee.

Property value is assessed by the Participating Lender, and it may be different to the purchase price.

The deposit requirement is for a percentage of the property value.

Property value is assessed by the Participating Lender, and it may be different to the purchase price. In those situations, please speak to your Participating Lender about what this means for you.
 

If you are applying on your own, your taxable income can be up to $125,000 a year. If you are applying with another person, then your combined taxable income can be up to $200,000 a year.

You’ll need to provide the Participating Lender with your Notice of Assessment issued by the Australian Taxation Office for the previous financial year.
 

The First Home Guarantee and Regional First Home Buyer Guarantee are for first home buyers or those who haven’t owned a property in Australia in the last 10 years.

The Family Home Guarantee is for first home buyers or those who won’t have any other property interest once their new home settles.

No, you don’t need to pay any fees for a Guarantee. However, you are responsible for all the costs and repayments on your home loan.

You can buy a new or existing residential property that you will live in as an owner-occupier.

Maximum price caps apply, are the same for all Guarantees, and vary by location. Note both the property purchase price and the property value must not exceed the price cap. For new builds with land and a separate build contract, the combined land purchase price and build cost must also stay under the cap.

Property value is assessed by the Participating Lender, and it may be different to the purchase price. In those situations, please speak to your Participating Lender about what this means for you.

Use the Postcode Search Tool (link) on this website to check the price cap for the location you want to buy in. The tool is only a guide - confirm the price cap with your Participating Lender for any property you are considering buying.
 

To help you work out which Guarantee might suit you:

• take a look at the Home Guarantee Scheme Comparison Table that compares the key features of each Guarantee. (link to page)
• use the Eligibility Tool for a quick check of the main eligibility criteria (link to Eligibility Tool)
• talk to a Participating Lender (link to lenders).

You can apply through a Participating Lender authorised by Housing Australia to offer the Home Guarantee Scheme.

They will assess your eligibility based on their lending criteria, guide you through the application process, and explain the documents and information to provide. They will submit an application to Housing Australia and inform you if you are eligible and if a place is available for you. 
 

Housing Australia has authorised Participating Lenders to offer the Home Guarantee Scheme. Check out who is on the list here. (link to Participating lender page)

The Guarantee stays in place until one of the following happens: 

• it becomes evident at any time that your home loan was not eligible for the Home Guarantee Scheme
• you stop living in the property without an exemption (circumstances to be discussed with your Participating Lender); if so your Participating Lender may require you to pay LMI or other significant costs relating to your loan
• you rent out the property
• you have fully repaid your home loan, including refinancing with a lender that is not a Participating Lender
• your loan principal balance drops to 80% or less of the property value, based on your scheduled home loan repayments (prepayments you can redraw are not counted)
• you borrow additional funds against the property from your Participating Lender, or
• you sell your home.