Family Home Guarantee

How does the Family Home Guarantee work?

Australian home buyers typically save a deposit of between 5% and 20%. But under the Family Home Guarantee an eligible single parent can buy a home with just a 2% deposit.

It's not really possible to get a home loan with a deposit below 5% in Australia except by using this scheme. And normally, any deposit below 20% also requires an extra charge called lenders mortgage insurance (LMI).

With the Family Home Guarantee you can avoid this cost completely and potentially save thousands of dollars.

The scheme's big benefit: Avoiding LMI costs

By acting as a guarantor, the federal government essentially backs the borrower and allows them to avoid this extra home buying cost.

Let's say you want to purchase a $600,000 home with a 10% deposit of $60,000. Normally, your lender would charge you an LMI premium on top. This could cost you around $11,000.

With the Family Home Guarantee, an eligible single parent you could buy a $600,0000 home with a deposit of just $12,000 (2%) and pay no LMI at all. That's an instant saving of $11,000.

Who is eligible for the scheme?

To be eligible, a single parent must:

• Be 18 or older.
• Be an Australian citizen or permanent resident with at least 1 dependent child*.
• Have an annual taxable income of less than $125,000.
• Be an owner-occupier not currently owning property or intending to own other property (but they do not need to be a first home buyer).
• Be buying or building a home to live in (not an investment property).

*You have to be a single parent or guardian at the "home loan date", which is the date you sign your home loan contract.

As with similar government schemes, there are region-specific price caps on properties. You can use the government's Property Price Cap Tool to look up the property price caps for your location. If the price of the property you are purchasing exceeds these caps, you will not qualify.

Property value caps

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

How do I apply for the scheme?

Housing Australia does not accept applications directly. Successful applicants need to apply for a home loan with a lender that is taking part in the scheme.

There is a limit of 5,000 places for the scheme in the 2025/26 financial year.

Which lenders are taking part in the Family Home Guarantee scheme?

Our expert says: Calculate your repayments

"If you bought a property for $750,000 using a 2% deposit thanks to the Family Home Scheme, you would be borrowing $735,000. Your monthly repayments over 30 years with a rate of 6% would be $4,407. In comparison, with a 10% deposit you'd borrow $765,000 and your monthly repayments would be $4,047. That's a $360 difference.

Schemes like these can be a fantastic support for buyers, but it's important you consider the costs and whether such a high loan amount is manageable for you."

Rebecca Pike

Editor, Money

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 at the start. In other words, you only own 2% of the property. The rest is debt.

If the value of the property went down, your debt could end up being more than the property's value. If you suddenly found you can't repay the loan and have to sell the property you could end up with very little left.

But as long as you're able to make your loan repayments this is not a problem because you will be building equity.

A bigger loan means larger repayments

The smaller your deposit, the more money you borrow. 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.

More guides and government support

• First Home Guarantee. The Family Home Guarantee is similar to the existing First Home Guarantee. This scheme allows first home buyers to enter the market with a 5% deposit while avoiding LMI costs.
• Regional Home Guarantee. Like the Family Home and First Home Guarantee, the Regional Home Guarantee lets you buy or build a new home in regional Australia with a small deposit (5%) while avoiding LMI.
• First Home Owner Grants and stamp duty. There are also first home owner grants available in every state and territory and possible stamp duty exemptions for first-time buyers.
• First Home Super Saver Scheme. The FHSS scheme lets first home buyers make voluntary super contributions, then withdraw those contributions to form a deposit, effectively gaining a solid tax discount to do so.

Need more help? Check out these guides

• How to save a house deposit
• First home buyer loans
• What is a guarantor?

More questions about the Family Home Guarantee

• How much can I borrow with the Family Home Guarantee?

  There are property price thresholds in each state and territory. By subtracting 2% of the price from those thresholds you'll get a good idea of the maximum amount you might be able to borrow. However, banks and lenders will still consider your financial situation to determine your borrowing power. Depending on your situation you may not be able to borrow the maximum amount. You can work out your borrowing power before you apply to know what you're likely to be approved for.

• What happens if I can't meet my home loan repayments?

  If you buy a home using the Family Home Guarantee but you find that you can't meet your repayments, the home will need to be sold to recoup the costs to the bank or lender. As soon as you find yourself struggling to repay the loan you should talk to your lender to see if they can put you on a hardship plan.

• I am separated but not divorced, am I eligible for the Family Home Guarantee?

  No, if you have separated from your partner but you're not divorced, you do not count as single.

  To be an eligible single parent you must not be married (even if you've separated) or in a de facto relationship.

• Can a family member act as guarantor?

  Yes. If your parents owned their own property, for example, they could guarantee your loan. This means using their property as security for your loan.

  This also helps get an application with a low deposit approved. And you can avoid LMI.

  But it does mean your parents putting their home at risk if you can't repay your loan.

Written by

Richard Whitten

Senior Money Editor

Richard Whitten is Finder’s Senior Money Editor, with over eight years of experience in home loans, property, credit cards and personal finance. His insights appear in top media outlets like Yahoo Finance, Money Magazine, and the Herald Sun, and he frequently offers expert commentary on television and radio, helping Australians navigate mortgages and property ownership. Richard started his career in education and textbook publishing in South Korea. He holds multiple industry certifications, including a Certificate IV in Mortgage Broking (RG 206) and Tier 1 and Tier 2 certifications (RG 146), as well as a Bachelor of Education from the University of Sydney and a Graduate Certificate in Communications from Deakin University. See full bio

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Richard has written 687 Finder guides across topics including:

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Co-written by

Sarah Megginson

Personal finance expert + media spokesperson

With over 20 years of experience in property, finance and investment journalism, Sarah is a trusted expert whose insights regularly appear across television, radio, and print media, including Sunrise, ABC News, and Yahoo! Finance. She has previously served as managing editor for Your Investment Property and Australian Broker, and her expert advice has been shared in the media over 3,500 times since 2023 alone. Sarah holds a Bachelor’s degree in Communications and a Tier 1 Generic Knowledge certification, which complies with ASIC standards. See full bio

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Sarah has written 211 Finder guides across topics including:

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