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30,000 additional places available under grants for eligible first home buyers, single parents

6 min read
2 Jul 2021

From 1 July 2021, first home buyers and single parents can access thousands of spots in various home buying support schemes.

An extra 30,000 places have been made available in total by the Federal Government across each of:

  • the First Home Loan Deposit Scheme (FHLDS)
  • the New Home Guarantee
  • and the Family Home Guarantee

The latter was first announced in the 2021/22 Federal Budget and is now available for the first time, while the FHLDS is entering its third year after it was first announced prior to the 2019 Federal Election.

Housing Minister Michael Sukkar said supporting Australians to buy a home “is a key priority for the Coalition Government as Australia continues its recovery from the COVID recession.”[1]

“In expanding the First Home Loan Deporsit Scheme and New Home Guaantee and introducing the Family Home Guarantee, the Coalition Government continues to ensure that people aspiring to enter the housing market and single parents looking to enter or re-enter the housing market can achieve the dream of home ownership,” he said.

How do these schemes work?

These three programs are administered by the National Housing Finance and Investment Corporation (NHFIC) in partnership with a range of participating banks and lenders.

The FHLDS and the New Home Guarantee offer 10,000 spots respectively per financial year, while the Family Home Guarantee offers those 10,000 spots across four financial years – so technically there are a total of 22,500 new spots available this financial year.

The participating lenders – of which there are 27 – include big four banks NAB and Commonwealth Bank, smaller credit unions, larger retail banks and specialist lenders like Indigenous Business Australia, and are committed to not charging eligible customers higher interest rates or fees for these loans.

To apply, Australians need to meet the eligibility requirements and can apply directly with a registered lender or through a mortgage broker.


What is the First Home Loan Deposit Scheme?

The first of these three schemes to be created, the First Home Loan Deposit Scheme allows 10,000 eligible first home buyers each year to avoid paying Lenders Mortgage Insurance (LMI) with a deposit as small as 5%.

The government instead guarantees the cost of LMI for the lender, which they normally charge on deposits below the 20% mark.

Unlike the First Home Owners Grant, this is not a cash deposit, but rather the government making it easier to buy with a smaller deposit, reducing the time taken to save for a first home.

These 10,000 spots are only available for properties that fall below certain price caps, which yesterday were increased by at least $50,000 in each state (see a table of these price caps below).

“The First Home Loan Deposit Scheme has been a landmark success of the Morrison government since its commencement in 2020,” Mr Sukkar said.

“Thirty thousand first home buyers have been supported into home ownership through First Home Loan Deposit Scheme and New Home Guarantee already.”

Data from the NHFIC in 2020 revealed as many as one-eighth of first home buyers at one point bought their first home buying using the FHLDS.[2]

What is the New Home Guarantee?

The New Home Guarantee is essentially the same thing as the FHLDS but reserves 10,000 spots purely for eligible first home buyers who are building or buying a newly constructed home.

It also allows first-time buyers to purchase LMI-free with a 5% deposit, but unlike the FHLDS, it has some much higher price caps, allowing for some more flexibility.

What is the Family Home Guarantee?

The ‘Family Home Guarantee (FHG) is a new scheme that allocates 2,500 spots per year (over the next four financial years) to single parents with at least one dependent child.

It’s very similar to the other two schemes with one major difference: single parents looking for a home can buy LMI-free with a deposit as low as 2% (98% loan-to-value ratio).

It’s also available for those who have owned a property before and can be used for new and existing homes.

“By supporting single parents and their children, we are helping them achieve the security and dignity that home ownership provides,” Minister Sukkar said.

“Through our First Home Loan Deposit Scheme and the New Home Guarantee Program, the Morrison government is helping more first home buyers and single-parent families overcome the challenges of saving for a deposit and realising the Australian dream of owning your own home.

“With the 30,000 new places available from 1 July, now is the time for potential applicants to contact a participating bank or mortgage provider and get their applications underway.”

The price caps for each of these schemes are below:

RegionFHLDS & Family Home Guarantee Price Caps ($AUD) effective 1 July 2021New Home Guarantee Price Cap ($AUD) effective 6 October 2020
NSW – capital city, regional centres$800,000$950,000
NSW – other$600,000$600,000
VIC – capital city, regional centre$700,000$850,000
VIC – other$500,000$550,000
QLD – capital city, regional centres$600,000$650,000
QLD – other$450,000$500,000
WA – capital city$500,000$550,000
WA – other$400,000$400,000
SA – capital city$500,000$550,000
SA – other$350,000$400,000
TAS – capital city$500,000$550,000
TAS – other$400,000$400,000
Northern Territory$500,000$550,000

Source: National Housing Finance and Investment Corporation (NHFIC).[3)

Major banks say these housing schemes are a success

While there are some reservations about these schemes, new data from Commonwealth Bank (CBA) reveals customers who used them to buy property shaved an average of 4.78 years off their home buying timeframe.[4]

More than 6,400 Australians have qualified for a home loan with CommBank under either the FHLDS or the New Home Guarantee, Michael Baumann, Executive General Manager of Home Buying at CBA said these customers were able to enter the property market nearly five years earlier than if they’d saved for the standard 20% deposit.

“Speaking to our lenders and brokers we know the schemes have been a great success for a wide range of different customers – both singles and couples – looking to realise their home ownership goals across the country,” he said.

According to CommBank’s data, buyers in New South Wales, where average prices are highest, saved the most time at 5.05 years.

Tasmanians saved the least at a still respectable four years exactly.

Compare home loans no matter what

There are 27 participating lenders to choose from when applying for a home loan through these government schemes. That’s a lot of competition between interest rates, fees and features, so you should consider comparing home loans available to you to find the right one for your needs.

Our online home loan comparison can not only help you compare some of these home loans (not all of the 27 lenders will be included) but can give you an estimate of the costs as well, factoring in the likes of stamp duty, lenders’ fees and more.

Begin your home buying journey with Compare the Market today.


  1. Ministers.treasury.gov.au, Minister Michael Sukkar MP, ‘New guarantees for first home buyers and single parents now available’. 1 July 2021.
  2. National Housing Finance and Investment Corporation, ‘First Home Loan Deposit Scheme: Trends and Insights’ report. 30 June 2020, accessed 2 July 2021.
  3. National Housing Finance and Investment Corporation, ‘FHLDS Price Caps, overview by region’. Accessed 2 July 2021.
  4. Commonwealth Bank, ‘CommBank customers entering property market years earlier using homebuyer schemes’. 1 July 2021.
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avatar of author: William Jolly

Written by William Jolly

William is a Senior Finance Writer at Compare the Market, and has previously worked as a finance journalist for several years. He specialises in writing about financial products like home loans in ways that the average Australian can understand and enjoy. When he's not writing about saving money, William enjoys playing football (soccer), watching a good movie and spending time with his dog.

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