Saving for a house deposit in Queensland isn’t easy, especially with the rising cost of groceries, rent, and just day-to-day life. Whether you're eyeing a spot in Brisbane, Ipswich, or one of our booming regional centres, that 20% deposit can feel completely out of reach for many first-home buyers.
But there’s some good news: the Australian Government has recognised this challenge and introduced a support scheme to give Queenslanders a leg-up. With the First Home Guarantee, you could get into your first home with just a 5% deposit, skipping the expensive Lenders Mortgage Insurance (LMI) altogether.
This guide breaks down exactly how the scheme works, who’s eligible, and why it could be the fast track to owning your place in the Sunshine State.
What Is the First Home Guarantee Scheme?
The First Home Guarantee Scheme is a government-backed program that helps eligible first-time buyers purchase a home with just a 5% deposit, instead of the usual 20%. It’s one part of the broader Home Guarantee Scheme, which is managed by Housing Australia.
The main goal? To make homeownership more achievable by removing the need to pay Lenders Mortgage Insurance (LMI), a cost that usually kicks in when your deposit is under 20%.
Instead, the government steps in as a guarantor for up to 15% of the loan, helping you get into a home sooner and with fewer upfront costs.
Who Can Apply for the First Home Guarantee Scheme?
Not everyone can jump into the First Home Guarantee Scheme. There are some specific rules around who qualifies, and as of 2025, a few updates have made it slightly more inclusive.
Here’s a full breakdown of the eligibility criteria:
First Home Buyer Status
You must be a first-home buyer; meaning, you’ve never owned or had an interest in a residential property in Australia.
Exception: If you haven’t owned a property in the past 10 years, you may still be eligible under the updated criteria.
Australian Citizenship or Permanent Residency
- You must be either an Australian citizen or a permanent resident.
- The inclusion of permanent residents is a 2025 update, giving more Australians access to the scheme.
Income Thresholds
Your income must fall below these limits based on your Notice of Assessment (NOA) from the 2022–23 or 2023–24 financial year:
- Single applicants: maximum $125,000 taxable income
- Joint applicants (two people): combined maximum $200,000 taxable income
Note: This does not include non-taxable income like child support or Centrelink payments.
Property Types
The property must be residential and meet the government’s list of acceptable property types, including:
- An existing house, townhouse, or apartment
- A house and land package
- Land with a separate contract to build (construction must start within 12 months)
- A newly built home or off-the-plan property
Owner-builder properties and investment properties are not allowed.
You must also live in the home as your principal place of residence for at least 6 months from the time of settlement or completion of construction.
Property Price Caps (as of 2025)
The purchase price must not exceed the maximum property price thresholds set by location. For Queensland, these are:
- Brisbane and regional centres: up to $700,000
- Other regional areas: up to $550,000
To be safe, always check the latest cap for your specific location at Housing Australia.
Let our expert Queensland mortgage brokers handle the paperwork, lender matching, and all the tricky bits of the First Home Guarantee Scheme. We’ll guide you from eligibility check to loan approval, stress-free. Call Zest Mortgage Solutions at (07) 3461 6499 or visit zestmortgagesolutions.com.au to get started.
How Does the First Home Guarantee Scheme Work?
So, how does the government help you buy a home with just a 5% deposit? It all comes down to the guarantee, the lender, and your ability to repay the loan over time.
Let’s break it down step-by-step:
1. The Government Acts as a Guarantor
Through the First Home Guarantee, Housing Australia guarantees up to 15% of your property’s value, meaning you only need a 5% deposit. This replaces the usual 20% deposit requirement and removes the need to pay Lenders Mortgage Insurance (LMI).
2. The Role of Participating Lenders
You can only access the scheme through a participating lender, like Commonwealth Bank, NAB, or non-major lenders like Auswide Bank or Australian Military Bank. These lenders assess your borrowing power and apply to Housing Australia for a guarantee allocation on your behalf.
3. How Much You Can Borrow
Your borrowing limit depends on your income, expenses, credit score, and the lender’s normal lending criteria. A mortgage broker can step in to help crunch the numbers, explain how the property price caps apply in your area, and match you with a lender that suits your budget and situation best.
4. How Repayments and Interest Work
You’ll still be taking out a standard home loan and making monthly repayments based on the interest rate, loan size, and type of loan (e.g. variable or fixed). Most lenders require principal and interest repayments, though interest-only loans may be an option for some buyers depending on the lender’s policies.
5. Timeline to Buy and Move In
Once your spot under the scheme is confirmed, you typically have 90 days to sign a contract of sale. After settlement or construction, you must move into the property within 6 months and live there as your main residence.
Pros and Cons of the First Home Guarantee Scheme
While the First Home Guarantee Scheme opens the door for many buyers, it’s not the perfect fit for everyone. Like any government program, there are clear upsides—but also some things to think carefully about.
Here’s a full look at the advantages and limitations every eligible home buyer should know before signing a loan agreement:
Pros
- Lower Deposit Needed: With just a 5% deposit, buyers can enter the market much faster, even with rising house prices across Queensland.
- No Lenders Mortgage Insurance (LMI): This saves eligible home buyers thousands of dollars upfront, allowing them to direct more funds toward their actual home loan or moving costs.
- Helps More Than Just Couples: The scheme is open to legal guardians, single parents, and joint applicants, so more families and non-traditional buyers can access support.
- Access to a Range of Property Types: It works for different living goals, whether you're buying an existing home, off-the-plan unit, or even building under an eligible building contract.
- Personalised Support with a Broker: Working with a mortgage broker helps you compare loan options, understand how the guarantee fits into your personal circumstances, and get professional advice every step of the way.
Cons
- Still a Full Loan Commitment: Even with the guarantee, you’re taking on the full mortgage. If your individual circumstances change, you’re still liable under your loan agreement.
- Spots Are Limited: There’s a fixed number of places each year, so timing matters. Missing out may mean delaying your purchase or saving longer.
- Other Costs Still Apply: Stamp duty, legal fees, inspections, and moving costs aren’t covered, so you’ll still need extra cash ready at settlement.
- Property Price Limits May Restrict Options: With house prices climbing in some suburbs, sticking under the price cap might mean adjusting your suburb or expectations.
- Lender Policies Vary: Not all lenders offer the same interest rates, loan features, or approvals. That’s where a mortgage broker becomes essential for comparing based on your individual circumstances.
With over 20 years in the industry, Zest Mortgage Solutions knows exactly how to structure a First Home Guarantee Scheme application that works. Our Queensland mortgage brokers handle the legwork, lender communication, and eligibility requirements so you can focus on finding the perfect home. Call (07) 3461 6499 or visit zestmortgagesolutions.com.au today to schedule a free chat with our expert brokers.
Frequently Asked Questions (FAQs)
What is the First Home Guarantee Scheme in QLD?
It’s a federal government initiative helping eligible first-home buyers purchase an eligible property with just a 5% minimum deposit. Instead of paying LMI, the government guarantees up to 15% of the loan through a scheme-backed Loan, based on a strict list of eligibility criteria and loan terms.
Is the First Home Buyer Grant $40,000 in Queensland?
No. As of 2025, the First Home Owner Grant is $30,000 in QLD. It applies to new builds or homes under an eligible loan, such as a construction loan, and excludes investment loans and owner-builder contracts. Always seek financial advice before applying.
What are the cons of the First Home Guarantee Scheme?
Places are limited, and buyers still take on the full loan balance. Not all types of property qualify, and you’ll still need savings for legal fees and stamp duty. The scheme excludes investment properties, lease of land, and some vacant land deals.
How does the First Home Guarantee Scheme work?
You apply through a lender or loan expert, who submits your loan application for a spot. If accepted, the government guarantees part of your loan. You must buy a real property from the approved list of property criteria and move in within 6 months of settlement.
How does the 2% deposit work?
Offered under the Regional First Home Buyer Guarantee, this supports eligible buyers in regional areas with just a 2% deposit. It’s for specific types of property under strict loan terms, and still requires credit approval, a valid tax return, and a joint application or single-parent status.
Final Thoughts
Buying your first home in Queensland doesn’t have to feel out of reach. With the First Home Guarantee Scheme, 2025 could be the year you stop renting and finally step into a home of your own. Whether you're a single parent, a couple starting fresh, or just someone ready to make a move, this scheme is designed to help people just like you.
At Zest Mortgage Solutions, we’ve been helping first-home buyers across Queensland make sense of government schemes, compare lenders, and get clear on their options, without the confusion. We offer a free consultation to go over your goals, your numbers, and the best way forward.
With offices in Ipswich and Springfield, we proudly serve clients across wider Queensland. Call us at (07) 3461 6499 or visit zestmortgagesolutions.com.au to chat with a local mortgage expert who actually gets where you’re coming from.
Let’s make your first home happen, together.
