- First-home buyers can waive LMI when buying a property, thanks to the First Home Guarantee
- You can buy a property with only a 5% deposit and No LMI.
- The Government acts as a guarantor on 15% of the value of your property, so you can avoid LMI.
- By waiving LMI, you can save thousands of dollars and get into your first home sooner.
- Click here to find out how to apply for the First Home Guarantee before places run out.
Buying your first home is a major financial milestone, but saving for a deposit can be a challenge—especially when faced with the added cost of Lenders Mortgage Insurance (LMI). However, government initiatives like the First Home Guarantee (FHBG) can help eligible first-home buyers avoid LMI, making homeownership more accessible and affordable.
In this article, we’ll break down how the First Home Buyer LMI waiver works, who qualifies under the First Home Guarantee, and how to apply.
First Home Guarantee - Summary
What is the First Home Guarantee?
The First Home Guarantee (FHBG) is an Australian Government initiative aimed at helping first-home buyers purchase a home sooner by reducing the upfront costs associated with a home loan. This scheme allows eligible buyers to secure a mortgage with as little as a 5% deposit, without needing to pay for LMI - a cost that typically adds thousands of dollars to a home purchase.
Instead of requiring a 20% deposit, the government acts as a guarantor for up to 15% of the deposit, therefore eliminating the need for LMI. The First Home Guarantee makes homeownership more affordable and accessible, particularly for those struggling to save a large deposit.
Who is Eligible for the First-Home Buyer LMI Waiver?
To qualify for the First-Home Buyer LMI waiver, you need to meet certain criteria. Make sure all of the following are applicable for your situation:
- you need to be 18+ years old
- you can be an individual borrower or two joint applicants (eg: partners, friends, siblings, other family members)
- you need to be an Australian citizen or permanent residents
- you need to live in the purchased property (cannot be used as an investment)
- you must not earn more than $125,000 per annum as an individual borrower or a combined annual income of $200,000 per annum for joint applicants
- this must be your first property purchase, or you have previously bought property but haven't owned any property or land in Australia in the last 10 years
To apply for an LMI waiver as a first-home buyer, or to find out more information, speak to an expert from Eden Emerald Mortgages by filling out the form below. They do not charge any fees (they are paid a commission by the lender), and they will help you through the entire LMI waiver and home loan process.
If you do not qualify for the LMI Waiver for first-home buyers, you may qualify for No LMI loans if you work in certain professions, for example if you're a nurse, teacher, accountant or engineer. Click here to see a full list of which professions are eligible for LMI waivers.
Speak to an Expert and Waive Your LMI
To receive free guidance throughout your home loan process, including expert advice and recommendations on LMI Waivers, we recommend speaking to Shaun by filling out the form below.
Shaun is an experienced mortgage broker from EE Mortgages who will call you to discuss your situation free of charge. You can also call him on (02) 9188 9398.
How Much Can I Borrow?
With the First Home Guarantee (FHBG), eligible first-home buyers can purchase a property with as little as a 5% deposit, without needing to pay Lenders Mortgage Insurance (LMI). This means buyers can borrow up to 95% of the property’s value, making it easier to enter the housing market sooner.
However, there are property price caps set by the Australian Government that vary by state and region, which determine the maximum amount buyers can borrow under the scheme. These price limits ensure the FHBG supports affordable homeownership while preventing excessive borrowing.
Property Price Caps by Location
State/Territory | Capital City and Regional Centre* | Rest of State |
|---|---|---|
NSW | $900,000 | $750,000 |
VIC | $800,000 | $650,000 |
QLD | $700,000 | $550,000 |
WA | $600,000 | $450,000 |
SA | $600,000 | $450,000 |
TAS | $600,000 | $450,000 |
ACT | $750,000 | Cell |
NT | $600,000 | Cell |
Jervis Bay Territory & Norfolk Island | $550,000 | Cell |
Christmas Island and Cocos (Keeling) Island | $400,000 | Cell |
* Regional centres are Newcastle and Lake Macquarie, Illawarra, Geelong, Gold Coast and Sunshine Coast.
Are There Limits on Types of Property?
The First Home Guarantee (FHBG) applies to a range of residential properties, giving first-home buyers flexibility in their purchasing options. Eligible properties include:
- Newly constructed homes
- Existing houses, townhouses, and apartments
- House and land packages
- Land with a contract to build
- Off-the-plan purchases
One key requirement is that the property must be suitable for immediate occupation and comply with all relevant building standards and regulations. This ensures buyers are purchasing a safe and legally approved home.
By covering both new and existing homes, as well as land and build contracts, the FHBG allows first-home buyers to choose a property type that best fits their budget, lifestyle, and long-term plans.
Which Lenders Offer LMI Waiver for First-Home Buyers?
There are 32 lenders that participate in the First Home Guarantee (FHBG) scheme, offering an LMI waiver for eligible first-home buyers. These include major banks, regional banks, and credit unions, eg: CBA, NAB, Westpac, St. George and more.
Since each lender has different requirements, interest rates, and loan terms, it’s important to compare options before applying. For expert guidance, consider speaking with a Mortgage Broker for First-Home Buyers like Eden Emerald Mortgages. A broker can help you:
- Identify lenders that offer the First Home Guarantee
- Compare interest rates and loan features
- Negotiate better terms based on your financial situation
- Guide you through the entire home loan process, making it smooth and simple
EE Mortgages is 100% free of charge for you to use (as they are paid a commission by the lender), so you might as well take advantage of their services.
How to Apply for First-Home Buyer LMI Waiver
The easiest way to apply for the First Home Guarantee (FHBG) and secure an LMI waiver is through a mortgage broker, who can help compare lenders and secure the best rates for you. The application process involves a few key steps:
1. Check Your Eligibility
Before applying, ensure you meet the eligibility criteria, which include:
- Being a first-home buyer
- Meeting income limits and property price caps
- Having a minimum 5% deposit saved
2. Gather Necessary Documentation
You’ll need to provide:
- Proof of income (payslips, tax returns)
- Identification documents (passport, driver’s license)
- Savings and financial statements
3. Work with a Mortgage Broker
Using a broker like Eden Emerald Mortgages, who specialises in first-home buyer loans, can simplify the process. A broker will:
- Compare lenders offering the First Home Guarantee
- Find the best interest rates and loan terms
- Handle the application process on your behalf
4. Get Pre-Approved & Find a Property
Once pre-approved, you can begin searching for a suitable home within the price cap for your location.
5. Submit Your Application to Housing Australia
Your mortgage broker will submit the FHBG application to Housing Australia. If approved, you can proceed with purchasing your property—without paying Lenders Mortgage Insurance (LMI).
6. Final Loan Approval & Settlement
Once your FHBG application is approved, your loan will go through the final approval and settlement process, allowing you to officially purchase your home.
Get Expert Help Today
Working with a mortgage broker ensures you get expert advice and the best possible loan terms for your situation. To get started, reach out to Eden Emerald Mortgages via the form below for a free consultation, or call them directly on (02) 9188 9398.
Speak to an Expert and Waive Your LMI
To receive free guidance throughout your home loan process, including expert advice and recommendations on LMI Waivers, we recommend speaking to Shaun by filling out the form below.
Shaun is an experienced mortgage broker from EE Mortgages who will call you to discuss your situation free of charge. You can also call him on (02) 9188 9398.