Guide - First Home Buyer Perth
First Home Guarantee WA: Buy With 5% and No LMI
The First Home Guarantee lets eligible Perth buyers purchase with as little as a 5% deposit and no Lenders Mortgage Insurance. Since October 2025 there is no cap on places and no income limit. Here is exactly how it works and what changed.
Quick facts: First Home Guarantee in WA (from 1 October 2025)
| Minimum deposit | 5% of purchase price |
| LMI payable | No, government guarantee replaces LMI |
| Perth price cap | $850,000 (from 1 October 2025) |
| Regional WA price cap | $600,000 (from 1 October 2025) |
| Income cap | None (removed 1 October 2025) |
| Annual places | Unlimited (no cap from 1 October 2025) |
| Administered by | Housing Australia, through participating lenders |
| Property types | New and established homes, house and land packages |
| Can combine with FHOG WA | Yes, if buying a new property under $800,000 |
What is the First Home Guarantee?
The First Home Guarantee - now also referred to as the Australian Government 5% Deposit Scheme - is a federal program administered by Housing Australia that allows eligible first home buyers to purchase a property with a deposit as low as 5% without paying Lenders Mortgage Insurance. The Australian Government guarantees up to 15% of the loan value, so the lender treats the loan as if the buyer has a 20% deposit - removing the LMI requirement entirely.
To understand why this matters, it helps to understand how LMI works. When you borrow more than 80% of a property's value, lenders require LMI, insurance that protects them rather than you, if you default on the loan. For a Perth buyer purchasing at $750,000 with a 5% deposit ($37,500), LMI can cost anywhere from $20,000 to $30,000 depending on the lender and the LVR. Some lenders allow buyers to capitalise LMI into the loan, which means you end up paying interest on it for decades.
The First Home Guarantee removes this cost entirely. The federal government guarantees up to 15% of the loan value, bringing the lender's effective exposure down to 80% or below. From the lender's perspective, the guarantee functions like a 20% deposit. No LMI is charged, and the guarantee does not need to be repaid.
Major changes from 1 October 2025: The scheme was significantly expanded. Income caps ($125,000 single / $200,000 couple) were removed entirely. The cap on annual places (previously 35,000 nationally) was also removed. All eligible first home buyers with a 5% deposit can now access the scheme. Perth's property price cap was raised from $600,000 to $850,000. The Regional First Home Buyer Guarantee was merged into this scheme.
First Home Guarantee vs First Home Owner Grant WA
These are two separate schemes from two different levels of government. Many first home buyers confuse them or think they have to choose between them. You do not. They serve different purposes and can be used simultaneously.
| First Home Guarantee | First Home Owner Grant WA | |
|---|---|---|
| Level of government | Federal | State (WA) |
| What it provides | Removes LMI requirement | $10,000 cash grant |
| Applies to | New and established homes | New builds only |
| Price cap (Perth) | $850,000 | $800,000 |
| Income test | None (removed October 2025) | None |
| Can be combined | Yes, use both on a new build | Yes, use both on a new build |
If you are buying a new property in Perth under $800,000, you may qualify for both the First Home Guarantee (no LMI on your 5% deposit) and the WA FHOG ($10,000 cash). A broker who works regularly with first home buyers in Perth will know which lenders offer both simultaneously and how to structure the application to maximise both entitlements.
Who is eligible?
Eligibility for the First Home Guarantee is assessed at the time of application. The main requirements are:
Australian citizen or permanent resident
You must be an Australian citizen or permanent resident. New Zealand citizens with a Special Category Visa are not eligible for the First Home Guarantee, though they may be eligible for other schemes. Temporary residents are not eligible.
First home buyer
You must not have previously owned a property in Australia, either individually or jointly. This includes investment properties. Even if you never lived in a property you previously owned, that ownership disqualifies you. Overseas property ownership does not disqualify you.
Owner-occupier intent
You must intend to live in the property as your principal place of residence. The First Home Guarantee is not available for investment property purchases. You must move in within a reasonable time of settlement and continue to occupy the property.
Property price within the cap
In Perth and major WA regional centres, the price cap is $850,000 (from 1 October 2025). For other regional WA areas, the cap is $600,000. The purchase price of the property must be at or below this cap. There is no partial qualification above the threshold.
Minimum 5% genuine deposit
You must have saved at least 5% of the purchase price as a genuine deposit. This generally means funds held in savings for at least three months. Gifts, grants (including the FHOG), and the First Home Super Saver Scheme (FHSS) can contribute to the deposit in many cases, but lenders have different policies on what counts as genuine savings.
Participating lender
The scheme is accessed through participating lenders only. Not every lender participates. A broker identifies which participating lenders are available to you and can compare rates across them, since the guarantee does not lock you into a particular product.
Single parents and legal guardians: The Family Home Guarantee is a separate but related federal scheme that allows eligible single parents and legal guardians with at least one dependent child to purchase a home with a minimum 2% deposit and no LMI. The same Perth price cap of $850,000 applies. It runs alongside the First Home Guarantee and is accessed through the same participating lenders. Unlike the First Home Guarantee, it is not limited to first home buyers - previous homeowners may also qualify in certain circumstances.
Perth property price caps explained
The $850,000 price cap for Perth applies to the purchase price on the contract of sale, not the property's estimated value. For house and land packages, it applies to the combined land and build contract value. For off-the-plan purchases, it applies to the contract price at the time of signing.
The cap creates a hard cutoff. A property priced at $860,000 does not qualify, even if the vendor accepts a lower offer. If you are searching in Perth near the upper end of the eligible range, confirm the contract price is within the cap before you sign.
| Location | Price cap (from 1 October 2025) |
|---|---|
| Perth (capital city) and major WA regional centres | $850,000 |
| Rest of WA (other regional areas) | $600,000 |
Always verify current caps: Price caps are set by the federal government and can be adjusted. Before making a purchase decision based on the scheme, confirm the current caps at the Housing Australia website or ask your broker to check on your behalf.
How the application process works
The First Home Guarantee is accessed through participating lenders. You cannot apply directly to Housing Australia. The process runs through your mortgage application rather than as a separate application.
| Step | What happens |
|---|---|
| 1. Check eligibility | Confirm you meet the citizenship, property type, and price cap requirements |
| 2. Choose a participating lender | Not all lenders participate. Your broker identifies which participating lenders have competitive rates and can process your application |
| 3. Pre-approval | Lender assesses your application and confirms a guarantee is available for you |
| 4. Find a property | Pre-approval gives you confidence to make offers within the price cap |
| 5. Formal approval | Lender submits final loan details to Housing Australia for guarantee confirmation |
| 6. Settlement | Loan settles without LMI. Government guarantee is in place for the life of the loan |
A broker adds meaningful value in this process because not all participating lenders are equal. Rates, policies on what counts as genuine savings, and how they assess different income types all vary. Getting pre-approval through the wrong lender can waste time and narrow your options when you find a property.
Stacking the schemes: maximum first home buyer benefit in Perth
If you are buying a new build in Perth, you may be eligible for several entitlements simultaneously:
- First Home Guarantee: purchase with 5% deposit, no LMI (saving $20,000-$30,000+ on a Perth purchase). Applies to new and established homes up to $850,000.
- WA First Home Owner Grant: $10,000 cash grant for new builds up to $800,000. See our FHOG WA guide for eligibility.
- WA stamp duty concessions: first home buyers get significant duty concessions. See our stamp duty WA guide for current thresholds and proposed changes (pending legislation).
- First Home Super Saver Scheme: withdraw up to $50,000 in voluntary super contributions toward your deposit.
Stacking these schemes requires careful coordination. Each has its own eligibility requirements, timing, and application process. A broker who works regularly with Perth first home buyers will know which lenders support all of these schemes simultaneously and how to sequence the applications correctly. Use the borrowing capacity calculator to get a rough read on your position before you book a call.
Common mistakes to avoid
- Applying through a non-participating lender. If your lender is not on the Housing Australia participating lender list, they cannot offer you the guarantee regardless of your eligibility. Always check the lender is a scheme participant before committing to an application.
- Counting ineligible funds as your deposit. Lenders have specific policies on what counts as genuine savings. Confirm with your broker what portion of your deposit qualifies before you start the application process.
- Missing the price cap on a negotiated purchase. The cap applies to the final contract price. If you are negotiating, ensure the agreed price, not the asking price, is within the cap before you sign.
- Not checking your citizenship or visa status. The scheme requires Australian citizenship or permanent residency. New Zealand citizens on an SCV, temporary residents, and visa holders are not eligible regardless of how long they have lived in Australia.
Frequently asked questions
What is the First Home Guarantee in WA?
The First Home Guarantee is a federal government scheme that allows eligible WA first home buyers to purchase with as little as a 5% deposit without paying LMI. The government guarantees up to 15% of the loan value, removing the need for LMI. From 1 October 2025 there is no income cap and no limit on places. It applies to both new and established homes in Perth up to the $850,000 price cap.
What is the property price cap for Perth?
From 1 October 2025, the price cap for Perth and WA major regional centres is $850,000. For other regional WA areas, the cap is $600,000. Properties above these thresholds are not eligible for the scheme. Always confirm current caps with your broker or at the Housing Australia website before making a purchase decision.
Can I use the First Home Guarantee with the WA First Home Owner Grant?
Yes. Both schemes can be used on the same purchase. The FHOG ($10,000 for new builds in WA up to $800,000) is a state scheme, while the First Home Guarantee is federal. If you are buying a new property under $800,000 and meet both sets of eligibility requirements, you can access both. A broker can help you structure the application to capture both simultaneously.
Who is eligible for the First Home Guarantee?
You must be an Australian citizen or permanent resident, aged 18 or over, a first home buyer with no prior property ownership in Australia, and intending to live in the property as your principal place of residence. From 1 October 2025 there is no income cap. The purchase price must be within the applicable cap for your location ($850,000 in Perth and major WA regional centres, $600,000 in other regional WA areas).
Do I pay LMI with the First Home Guarantee?
No. The scheme eliminates LMI entirely for eligible buyers. The government guarantee replaces LMI. You do not pay it upfront, nor is it added to your loan. The saving is typically $20,000-$30,000+ on a Perth purchase near the price cap.
Are there limited places in the First Home Guarantee?
No. From 1 October 2025 the scheme has no cap on places. Previously 35,000 national places were available per financial year and could run out at popular lenders. That restriction no longer applies. All eligible first home buyers who have saved a 5% deposit can now access the scheme.
Will the First Home Guarantee be extended in 2026?
The First Home Guarantee was significantly expanded from 1 October 2025 - removing income caps and annual place limits entirely - and continues with no announced end date. The scheme is now part of permanent federal housing policy rather than a capped annual program. All eligible first home buyers with a 5% deposit can access it regardless of income, with no waiting for places to open.
What are first home buyers entitled to in WA?
WA first home buyers may access several entitlements simultaneously: the WA First Home Owner Grant ($10,000 for new builds up to $800,000), the First Home Guarantee (5% deposit, no LMI, up to $850,000 in Perth), WA stamp duty concessions (no duty on purchases up to $500,000 under current law), the First Home Super Saver Scheme (up to $50,000 in super withdrawals toward a deposit), and Keystart (WA Government lender, 2% minimum deposit). Eligibility for each is assessed separately and most can be combined.