Regional First Home Buyer Guarantee

The Federal Government has launched an initiative to help eligible first home buyers in regional Australia enter the property market sooner with a deposit as low as 5% (without the need to pay LMI).

Updated 10 May 2023
This article is based on publicly available information as at 10 May 2023

The Regional First Home Buyer Guarantee can help first home buyers buy their first home in designated regional areas with a deposit of as little as 5%.

During the 2022 federal election campaign the Labor Government initially proposed the "Regional First Home Buyer Support Scheme" in an effort to triple the number of people in regional areas who can access a government Home Guarantee Scheme.¹

Renamed the Regional First Home Buyer Guarantee (RFHBG), this initiative officially launched on 1 October 2022 and is set to run until 30 June 2025.

What is the Regional First Home Buyer Guarantee and how does it work?

The Regional First Home Buyer Guarantee (RFHBG) allows first home buyers to purchase a home with as little as a 5% deposit and avoid paying lenders mortgage insurance (LMI). Under the RFHBG, up to 15% of a first home buyer’s home loan can be guaranteed by the Government.

LMI is usually payable to the lender if your deposit is less than 20% of the property’s purchase price. As the Government will place a guarantee on your loan for up to 15% of the purchase price, eligible participants of this scheme with a home loan from a participating lender will be able to avoid paying LMI.

There are 10,000 places available each financial year (up until 30 June 2025).²

Eligibility criteria for the Regional First Home Buyer Support Scheme

Residency: You must live outside a capital city and have been living in the regional area or adjacent regional area you intend to purchase for at least 12 months prior to the date you sign your home loan agreement with your lender.
Citizenship:  Be an Australian citizen, at least 18 years of age. From July 1 2023, the scheme will also be available to eligible borrowers who are Australian Permanent Residents.⁴
First home buyer: Have not previously and do not currently own a home 
Residential property:  You must live in the property you purchase 
Income: Have a taxable income of up to $125,000 per year for singles and $200,000 per year for couples 
Property Price: The property purchased may not exceed the price caps shown in the table below in each region.
For couples: Applicants prior to 1 July 2023 were restricted to those who were married or in a de-facto relationship, as well as single applicants. From 1 July 2023, any two eligible people may apply together, including friends, siblings or other family members.⁴

Property price caps for the Regional First Home Buyer Support Scheme

Regions	Property Price Cap
NSW – Illawarra, Lake Macquariet & Newcastle	$900,000
NSW - Other regional areas	$750,000
VIC – Geelong	$800,000
VIC - Other  regional areas	$650,000
QLD – Gold & Sunshine Coast	$700,000
QLD - Other  regional areas	$550,000
WA	$450,000
TAS	$450,000
SA	$450,000
NT	$600,000

Source: https://www.nhfic.gov.au/what-we-do/support-to-buy-a-home/regional-first-home-buyer-guarantee/

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FAQs about the Regional First Home Buyer Support Scheme

What are the benefits of the scheme?

The benefits of this scheme for eligible first home buyers in regional Australia can include

Entering the property market earlier by not needing to save 20% deposit 
Initial savings of when purchasing your property by not paying LMI.

Example of how the Regional Home Guarantee works

If you’re looking to purchase a property in Newcastle, NSW that is valued at $800,000, but you only have a 5% deposit of $40,000, you would usually need to pay LMI.  

However, if you successfully receive one of the 10,000 places in the Regional First Home Buyer Guarantee for FY23, the Government would be able to provide a guarantee for the remaining 15% to cover your loan amount in the case of a default. In this example, you would be saving thousands due to this scheme, by avoiding the LMI payment. 

What is a regional area?

For the purposes of the RFHBG, a regional area is defined by the Statistical Area Level 4 areas in a State or the Northern Territory that are not a capital city of that State or Territory, as defined by the ABS.³

For more information on whether the area you are intending to purchase your first home is classified as a regional area as a part of RFHBG you can use the NHFIC’s Regional Checker.

What type of property is eligible for the Regional First Home Buyer Guarantee?

Eligible residential properties for the RFHBG include:

An existing house, townhouse or apartment
A house and land package
Land and a separate contract to build a home
An off the plan apartment or townhouse

How to apply for the Regional First Home Buyer Guarantee?

To apply for the RFHBG, you need to apply for a home loan with one of the Scheme’s participating lenders.

To find out which lenders are participating in the scheme, and if you may be eligible, you can contact your local Mortgage Choice broker who can assist with your application.

First home buyer's guide

Purchasing your first property can be an overwhelming process and there may be steps you are unsure or unaware aware of. This guide will walk you through all of the steps involved in the buying process.

Download now

1 https://www.alp.org.au/policies/regional-first-home-buyer-support-scheme
2 https://www.nhfic.gov.au/what-we-do/support-to-buy-a-home/regional-first-home-buyer-guarantee/
3 https://www.abs.gov.au/ausstats/abs@.nsf/Lookup/by%20Subject/1270.0.55.001~July%202016~Main%20Features~Statistical%20Area%20Level%204%20(SA4)~10016
4 https://ministers.dss.gov.au/media-releases/11036