Thinking about buying your first home, but not sure how you're going to be able to afford it? You're not alone. People right across the country are feeling the pressure when trying to save for a house, and it can be hard to imagine actually getting your foot in the housing market door.

First Home Guarantee Scheme (FHBG)

The First Home Guarantee (FHBG) is an Australian Government initiative that aims to support first home buyers in purchasing a home sooner. This is a part of the Government's wider Home Guarantee Scheme.

The scheme allows you to purchase a home with as little as 5% deposit without paying Lenders Mortgage Insurance.

Not sure what Lenders Mortgage Insurance is?

Generally you will need to put down a deposit of at least 20% of the property's full price to secure it. If you don't have 20%, it's still possible to purchase a house but you will need to pay what's called Lenders Mortgage Insurance (LMI). This protects the bank against the risk of you not being able to meet loan repayments.

LMI is a huge added cost to buying a home, in some cases adding tens of thousands of dollars onto your loan.

Eligibility for First Home Guarantee Scheme

To be eligible for the First Home Guarantee Scheme, you need to meet the following criteria. You must be:

• Applying as an individual or couple (married or defacto)
• An Australian citizen
• At least 18 years of age
• Earn an annual salary of less than $125,000 if you're an individual buyer, and less than $200,000 combined if you're buying as a couple
• Planning to live in the house as an owner-occupier, and not use it as an investment property
• Purchasing a home for the first home

Types of properties and price thresholds

Under the scheme, eligible residential properties include:

• an existing home, townhouse or apartment
• a house and land package
• land and a separate contract to build a home
• an off-the-plan apartment or townhouse

There are also price caps for properties. In the Northern Territory the price cap is $600,000.

How to apply

To apply for this scheme and start your home ownership journey, get in touch with our team of Home Loan Specialists and we can walk you through the process. We'll work with you to assess your eligibility before making the application on your behalf.

There are only 35,000 places available for the First Home Guarantee Scheme, so if you're thinking about buying your first home, we recommend getting in quick.