What HGS actually does.
Housing Australia guarantees up to 15% of the loan so your lender can approve a 95% LVR loan without charging Lenders Mortgage Insurance. You still borrow 95% of the price, still make the full repayment, still hold the title — but you skip a $15K–$40K LMI premium that would otherwise be added to your loan or paid at settlement.
Formerly called the First Home Loan Deposit Scheme (FHLDS), renamed and expanded in 2023. The guarantee is to the bank, not to you — but the financial benefit flows to you because the bank doesn’t need to buy LMI.
Eligibility at a glance (2025-26).
- Australian citizen or permanent resident (expanded from citizens-only in 2025).
- 18+.
- First home buyer — no property ownership in Australia in the prior 10 years.
- Owner-occupier — you intend to live in the property, not rent it out.
- Income under $125,000 single / $200,000 couple (previous financial year, gross).
- Buying under the state-specific property cap (table below).
The cap is on your individual or combined taxable income in the last financial year, from your notice of assessment. Recently-married couples whose incomes separately pass but combined fail are ineligible — this is the most-missed eligibility gap.
2025-26 property caps by state.
| State | Metro cap | Regional cap |
|---|---|---|
| NSW | $900,000 | $750,000 |
| VIC | $800,000 | $650,000 |
| QLD | $700,000 | $550,000 |
| WA | $600,000 | $450,000 |
| SA | $600,000 | $450,000 |
| TAS | $600,000 | $450,000 |
| ACT | $750,000 | — |
| NT | $600,000 | — |
Caps are the purchase price ceiling, not the loan size. Property must be in the state you’re applying for. Re-check Housing Australia before signing — caps are reviewed each financial year.
How much does HGS actually save?
LMI scales with loan size and LVR. On a 95% LVR loan:
- $500K loan: LMI typically $14,000–$18,000 → saved by HGS.
- $700K loan: LMI $22,000–$28,000.
- $850K loan: LMI $30,000–$38,000.
Beyond the LMI saving, HGS also means you can buy 12–18 months sooner than you could if saving the full 20% deposit. In a market rising 5%+ pa, that speed-to- market is worth another $30K–$50K of appreciation captured rather than chased.
Test your HGS eligibility →
Our buying power calculator flags HGS against your income + target state automatically.
Open buying power calculatorApplication timing — the thing most buyers get wrong.
Places are allocated each financial year (1 July–30 June) and run out. In recent years most places were gone by December–February. If you’re hoping to use HGS, target lender pre-approval in July or early August, not March.
You don’t apply to Housing Australia directly. Your lender reserves a place as part of your pre-approval process — 33 participating lenders (all major banks plus many smaller lenders). If your lender of choice has exhausted their allocation for the year, you can switch to another participating lender who still has places.
HGS variants.
- First Home Guarantee— the main 5% deposit scheme we’ve described above.
- Regional First Home Buyer Guarantee — same mechanic, purchase must be in a designated regional area. Some regional locations have lower property caps than metros.
- Family Home Guarantee — for single parents with at least one dependent child. 2% deposit required.
- Help to Buy (new from 2024) — shared equity scheme where the Commonwealth takes a 30–40% stake. Different product; not the same as HGS.
The short version.
HGS saves $15K–$40K in LMI on a 95% LVR loan for eligible first home buyers, accelerating market entry by 12–18 months versus saving 20%. Apply early in the financial year, check state property caps against your target suburb, combine with state FHB stamp duty concession + FHSS for a stack worth $60K–$90K at settlement.
For the full FHB scheme stack (HGS + FHSS + FHOG + state duties), see our 2026 first home buyer guide.
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