Family Home Guarantee

10,000 single parents will be able to buy a home with a 2% deposit under the government's Family Home Guarantee.

We’re reader-supported and may be paid when you visit links to partner sites. We don’t compare all products in the market, but we’re working on it!

The Family Home Guarantee allows single parents to enter the property market with small deposits. By acting as guarantor, the government will enable 10,000 single parents to buy homes faster while avoiding the cost of lenders mortgage insurance (LMI) that usually applies to low deposit borrowers.

Buyers in this scheme need to borrow the remaining 98% and must prove that they can repay the loan, as with any other borrower.

How does the Family Home Guarantee work?

Australian home buyers typically save a deposit of between 5% and 20% of their property's value. They save the deposit and borrow the rest. Under the Family Home Guarantee, an eligible single parent can buy a home with just a 2% deposit.

This is a much smaller deposit size and allows the borrower to get a home more easily. It does mean they have a bigger loan, however.

The scheme's big benefit: Avoid LMI costs

Normally, when your deposit is smaller than 20%, your lender will also charge you lenders mortgage insurance (LMI). LMI premiums can cost thousands, or even tens of thousands of dollars. LMI protects the lender in the event you can't repay the loan.

Under the Family Home Guarantee, a single parent can get a home loan with a 2% deposit and avoid lenders mortgage insurance. By acting as a guarantor, the federal government essentially backs the borrower and allows them to avoid this extra home buying cost.

Check the NHFIC website for more information about the scheme.

Who is eligible for the scheme?

While we don't have all the details at this point, to qualify for the scheme, a single parent must:

  • Be an Australian citizen (not a resident) with dependent children
  • Have an annual taxable income of $125,000 or less
  • Be an owner-occupier (but they do not need to be a first home buyer)
  • Be building a new home or purchasing an existing home

As with similar government schemes, there will likely be region-specific price caps on properties. If the price of the property you are purchasing exceeds these caps, you will not be able to qualify.

Property value caps

To be eligible for the scheme you must be purchasing a property valued at or below the following thresholds:

State/Territory/regionPrice cap
NSW - capital city$800,000
NSW - regional centre$800,000
NSW - rest of state$600,000
VIC - capital city$700,000
VIC - Geelong$700,000
VIC- rest of state$500,000
QLD - capital city$600,000
QLD - regional centre$600,000
QLD - rest of state$450,000
WA - capital city$500,000
WA - rest of state$400,000
SA - capital city$500,000
SA - rest of state$350,000
TAS - capital city$500,000
TAS - rest of state$400,000
Jervis Bay and Norfolk Island$550,000
Christmas Island and Cocos Island$400,000

How do I apply for the scheme?

There is a limit of 10,000 places for the Family Home Guarantee, or 2,500 places per year across the next four financial years. You need to apply via the scheme's administrator, the National Housing Finance and Investment Corporation (NHFIC).

Successful applicants also need to apply for a home loan with a lender that is taking part in the scheme.

Lenders taking part in the scheme

Are there any risks with this scheme?

Buying a home with just a 2% deposit does come with some risks. For one, you have very little equity in the property. This means that you start your home loan owning just 2% of the property. If the value of the property went down, your debt could end up being more than the property's value.

As long as you're able to make your loan repayments, then this is not a problem because you will be building your equity. But borrowing 98% also means that your loan will be quite substantial. The smaller your deposit, the more money you borrower. And the more you have to borrow, the more interest you pay.

While the Family Home Guarantee is a federal policy intended to support single parents, if you can't repay the loan, then the government won't help you. You will have to sell the property so the lender can recover the debt.

The Family Home Guarantee is similar to the existing First Home Loan Deposit Scheme. This scheme allows first home buyers to enter the market with a 5% deposit. They can also avoid LMI costs.

There are also first home owner grants available in every state and territory and possible stamp duty exemptions for first-time buyers.

The First Home Super Saver Scheme also exists to support first home buyers by allowing voluntary super contribution withdrawals.

HomeBuilder provides cash grants to first home buyers building new homes.

Need more help? Check out these guides

More guides on Finder

Home Loan Offers

Important Information*

Find the right home loan now

Ask an Expert

You are about to post a question on

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms of Use, Disclaimer & Privacy Policy and Privacy & Cookies Policy.

4 Responses

    Default Gravatar
    GabJuly 31, 2021

    If I’m a single parent and have a 2% deposit, do I also need to have the stamp duty amount to pay from my own pocket ? Or does this amount get added to the loan ?

      Avatarfinder Customer Care
      SarahAugust 3, 2021Staff

      Hi Gab,

      You’ll need to pay for stamp duty on top of your deposit, and this is an additional cost on top of other upfront costs such mortgage application fees and conveyancing fees. These other fees and charges, including stamp duty, are not generally able to be added to the loan.

      However as a first home buyer, you may be eligible for a hefty discount or even a waiver worth up to 100%.

      You can apply for the Family Home Guarantee through lenders directly, or through mortgage brokers participating in the scheme. Here’s a little more info:

      I hope this helps,


    Default Gravatar
    TroyJuly 12, 2021

    Hi I would like to have a professional (Broker?) contact me so I can check my eligibility and start the process.

      Avatarfinder Customer Care
      SarahJuly 19, 2021Staff

      Hi Troy,

      On the top left of this page you’ll notice an option that says ‘Brokers’. Click on this to get a dropdown list of brokers; click on the name of the broker you want to learn more about, and you’ll be redirected to the Finder review page.

      From there, you can select your area and you’ll be connected to a broker in your area to help you with your home loan.

      Hope this helps!


Go to site