Buying your first home in a high-demand area like North Shore Sydney can feel overwhelming, especially when trying to save a traditional 20% deposit while property prices keep moving. The First Home Guarantee Scheme is designed to ease that pressure by allowing eligible first-home buyers to purchase with as little as a 5% deposit and no Lenders Mortgage Insurance (LMI).

In 2026, understanding how the scheme works, who qualifies, and how lender requirements apply is essential. With guidance from an experienced North Shore Sydney broker like Sabea Financial, buyers can better navigate the eligibility criteria, participating lenders, and application process with greater confidence.

Let’s go into more detail about how this government scheme works.

What Is the First Home Guarantee Scheme?

The First Home Guarantee Scheme is a federal government initiative that allows eligible first-home buyers to purchase a property with a deposit as low as 5% without paying Lenders Mortgage Insurance. It forms part of the Home Guarantee Scheme administered by Housing Australia and is designed to improve access to home ownership, particularly in higher-priced markets such as North Shore Sydney.

How Does the First Home Guarantee Scheme Work? 

The First Home Guarantee Scheme helps eligible first-home buyers purchase a home with as little as a 5% deposit, without paying Lenders Mortgage Insurance (LMI). Instead of a guarantor, the government steps in to secure the loan by covering up to 15% of the property’s value.

Here’s how the scheme works in practice:

• Government Guarantee: Housing Australia guarantees up to 15% of the property’s value, enabling you to borrow up to 95% without LMI.
  
  
• LMI Waiver: This government backing means you won’t need to pay LMI, which can save you thousands.
  
  
• Property Eligibility: The home must be within the price caps set for your area — in North Shore Sydney, this typically ranges up to $1,000,000 (confirm each year).
  
  
• Owner-Occupier Requirement: You must live in the home within 6 months of settlement and remain there for at least 12 months.
  
  
• Deposit Range: You must contribute at least 5% but less than 20% of the property price as a genuine deposit.
  
  
• Annual Place Limits: Spots are capped each financial year, so timing matters.
  
  
• Participating Lenders Only: You must apply through one of the approved scheme lenders.

Because not all lenders offer this scheme and criteria can vary, mortgage brokers play a key role in helping you secure the right loan through the correct channel.

Who Is Eligible for the First Home Guarantee Scheme in 2026?

To be eligible for the scheme in 2026, applicants must meet specific criteria set by Housing Australia. Here’s a breakdown of the key requirements:

• First-home buyer status: You must have never owned property in Australia.
• Citizenship: Must be an Australian citizen or permanent resident aged 18 or over.
• Income cap:
• $125,000 or less for individuals
• $200,000 or less for joint applicants (based on previous financial year)
• Deposit: You must have between 5% and 20% of the property price saved.
• Owner-occupier: You must live in the property; the scheme does not apply to investment properties.
• Property price cap: In 2026, the price threshold for North Shore Sydney is expected to remain around $900,000 – $1,000,000, depending on the exact location. Always confirm with current limits.

Note: While similar in name, this is not the same as a family guarantee loan, where a family member offers equity from their home as security. The First Home Guarantee Scheme does not require any family involvement.

How to Apply for the First Home Guarantee Scheme in North Shore Sydney

Applying for the First Home Guarantee Scheme in North Shore Sydney involves a few key steps, and getting it right from the start can make all the difference. Since spots are limited and property prices are higher in the region, preparation and timing are essential.

Here’s how to apply:

1. Check Your Eligibility

Make sure you meet the scheme’s criteria, including first-home buyer status, income limits, and a 5–20% deposit.

2. Review Property Price Caps

Confirm that your target property falls under the current price threshold for North Shore Sydney, which is typically around $900,000 to $1,000,000.

3. Engage a Mortgage Broker

A local broker can assess your situation, match you with a participating lender, and manage the application process.

4. Get Pre-Approval with a Scheme Lender 

Apply for conditional loan approval through one of the authorised lenders offering the scheme.

5. Reserve a Scheme Place

Once pre-approved, your broker will request a place in the scheme from Housing Australia before they run out.

6. Find and Purchase Your Property

With your place reserved, you can confidently proceed to make an offer on a suitable home.

7. Finalise Your Home Loan

Your broker will manage the transition from pre-approval to formal approval and settlement.

Partnering with a North Shore Sydney mortgage broker like Sabea Financial ensures your application is correctly structured, eligible, and aligned with current scheme rules.

How Mortgage Brokers Help with the First Home Guarantee Scheme

Working with a mortgage broker isn’t just helpful; it’s a game-changer, especially when applying for a scheme like this. Here’s how a North Shore Sydney mortgage broker like Sabea Financial supports you:

• Interpreting Lender Policies: We help identify which lenders are participating in the scheme and which ones suit your financial profile.
• Application Structuring: We position your application to meet both lender and Housing Australia criteria.
• Avoiding Pitfalls: Brokers anticipate common mistakes that cost you time, money, or your place in the scheme.
• Tailored Strategy: We evaluate your situation and craft the best approach to maximise your approval chances.

With rising property prices in North Shore Sydney, expert guidance from Sabea Financial can be the difference between missing out and moving in.

FAQs

Is the First Home Guarantee Scheme still available in 2026?

Yes, the scheme is active in 2026 with annual caps and updated eligibility thresholds confirmed by Housing Australia.

Do I have to pay back the government guarantee?

No, the government’s 15% guarantee is not a loan — it's a security, not something you repay.

Can I use the scheme to buy an apartment in North Shore Sydney?

Yes, both apartments and houses are eligible if they meet the price caps and you intend to live in the property.

Can couples apply jointly for the First Home Guarantee Scheme?

Yes, two applicants (married or de facto) can apply jointly, provided their combined income is under $200,000.

What happens if I move out before 12 months?

If you move out within 12 months, you may breach the scheme’s terms, which could have financial implications. Always notify your lender.

Can I use a gift from family as my 5% deposit?

Yes, as long as the funds are genuinely gifted and the lender accepts it as part of your deposit, which varies by lender policy.

What’s the difference between this and a guarantor loan?

A guarantor loan involves a family member offering their home as security. The First Home Guarantee Scheme involves no family member or third-party security.

Ready to Buy Your First Home in North Shore Sydney?

The First Home Guarantee Scheme is one of the most powerful tools first-time buyers in Australia can use in 2026, especially in high-demand areas like North Shore Sydney. It allows you to get into your home sooner, without the burden of a full 20% deposit or expensive LMI.

With eligibility requirements, annual caps, and lender variations, having expert guidance is key. That’s where Sabea Financial comes in. Our team of trusted North Shore Sydney mortgage brokers are here to walk you through every step, from checking eligibility to settlement.

Contact Sabea Financial today to find out if the First Home Guarantee Scheme is right for you. Call us today at 1300 001 755 to get started. 



External Resources

• https://www.moneysmart.gov.au/home-loans
• https://www.servicesaustralia.gov.au
• https://www.apra.gov.au