As an ANP team that specializes in serving buyers in Chinese-speaking regions, we often receive inquiries from clients: "Is it necessary to pay a 20% deposit when buying a property in Australia?" In fact, the federal government has Housing Australia Promoted Home Guarantee Scheme(Home Purchase Guarantee Scheme) has significantly lowered the threshold for first-time homebuyers. Qualified buyers only need to pay a deposit of 2% to 5% to enter the market without having to pay expensive lender insurance (LMI), which can save buyers thousands to tens of thousands of Australian dollars.
Architecture Overview
The Home Guarantee Scheme is a government-issued guarantee provided by Housing Australia to participating banks. The guarantee covers up to 15% to 18% of the property's value, helping to cover any shortfall in a buyer's deposit. This allows banks to approve higher-ratio mortgages without requiring lender's insurance. The scheme does not relieve buyers of future mortgage repayment obligations; it simply reduces the down payment required to enter the market, helping eligible individuals purchase their homes more quickly.
Three guarantee options to suit different buyers' needs
The Home Guarantee Scheme consists of three sub-schemes, covering different family situations:
- First Home Guarantee (FHBG)
Suitable for first-time homebuyers or those who haven't owned a property in the past ten years. A minimum deposit of 5% is required, with the government providing a guarantee of up to 15%, and the bank approving the remaining balance. Applicants must be Australian citizens or permanent residents and meet the income cap of A$125,000 for individuals and A$200,000 for couples. - Regional First Home Buyer Guarantee
The conditions are the same as FHBG, but it is designed specifically for first-time homebuyers living in regional Australia to encourage regional populations to stay. - Family Home Guarantee
Designed specifically for single-parent families or applicants with guardianship responsibilities, the deposit can be as low as 2% and the government guarantee amount can be as high as 18%, greatly lowering the entry threshold for single-parent families.
All three programs are available for new and existing properties, off-the-plan properties, and house-and-land packages, subject to meeting regional property price caps. Applications must be made through participating banks or lenders. Our team can also assist with eligibility assessments and matching you with suitable lenders.
More people will benefit from the expansion, but please pay attention to risk management
Details of expansion from October 2025
since From October 1, 2025, the Home Guarantee Scheme entered a major reform phase, including:
- Remove the annual quota cap: There is no longer a limit on the number of applicants each year, and all qualified applicants can submit an application.
- Completely remove the income cap: All previous restrictions on individuals (≤ A$125,000) and joint names (≤ A$200,000) have been removed, and people of all income levels are eligible to participate.
- Significantly increase property price caps:
- Simplified regional procedures: The Regional First Home Buyer Guarantee will be incorporated into the general First Home Guarantee, while streamlining the process.
- Launch time ahead of schedule：Originally scheduled for implementation in 2026, it has now been brought forward to October 2025 Officially takes effect.
The Budget Department estimates that in the first year, due to the abolition of the quota cap, the number of new applications for protection may reach an additional 20,000 cases.
While a low deposit can help you enter the market faster, it also means a higher loan amount, increased interest payments, and greater repayment pressure. We recommend that clients carefully calculate their monthly repayment ability and consider the ratio of fixed to floating interest rates before deciding to enter the market to mitigate the risk of interest rate hikes.
Help to Buy scheme: Government co-finances home purchases
In addition to the guarantee program, the federal government is also preparing Help to Buy Plan, adopt shared-equity Under this model, the government purchases a portion of the property's equity. Buyers only need to pay a 2% deposit and the remaining mortgage balance, and the government's stake is repurchased upon future sale or redemption. This program is expected to be implemented in several states by the end of 2025, further reducing the financial burden on first-time homebuyers. We will continue to monitor the program's progress and notify our customers as soon as possible.
ANP professional advice
ANP advises clients interested in purchasing a property in Australia to first assess their financial situation and repayment capacity before selecting an appropriate government program. For first-time homebuyers or single-parent families, the Home Guarantee Scheme can significantly shorten the time it takes to save for a property, allowing you to enter the market earlier. To further reduce entry costs, consider exploring Help to Buy programs. Our team, comprised of urban planners, lawyers, mortgage advisors, and property consultants, can oversee the entire process, from site selection and planning, legal review, loan arrangement, to property completion, ensuring every step is secure and reliable.
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