Regional First Home Buyer Guarantee: What does it offer home buyers?

There are a number of government home loan schemes in Australia which can help you buy a home, and one of those is the Regional First Home Buyer Guarantee (RFHBG).

This particular initiative is aimed at helping Australians living in regional areas to buy their first home, using a deposit as little as 5% of the property’s total price.

It forms just one part of the government’s overall Home Guarantee Scheme (HGS), which has helped around 51,900 people buy a home in regional Australia since its beginning in January 2020.

The Regional First Home Buyer Guarantee is one of several government home loan schemes designed to help Australians in regional areas buy a home with a small deposit.

It allows eligible applicants to purchase their first home with a deposit as low as 5%, without the need to pay for lenders mortgage insurance (LMI). LMI is a significant fee that typically needs to be paid on home loan deposits of less than 20%.

In this way, the Regional First Home Buyer Guarantee can help those who may be struggling to save for their first home loan deposit get into the market sooner. It forms just one part of the government’s overall Home Guarantee Scheme (HGS).

To be eligible for the Regional First Home Buyer Guarantee, you need to be:

• An individual or joint applicant
• An Australian citizen or permanent resident, and at least 18 years old
• Earning up to $125,000 per year as an individual, or up to $200,000 per year as joint applicants
• Living in the regional area or an adjacent regional area where you are intending to buy for the past 12 months
• Intending to be an owner occupier (not investment), with a deposit of at least 5% of the property’s purchase price
• A first home buyer, or someone who hasn’t owned property for the last 10 years

The Regional First Home Buyer Guarantee has 10,000 places available to eligible home buyers each financial year, up until 30 June, 2025.

If you want to apply for the Regional First Home Buyer Guarantee, take these steps first:

• Start by using the eligibility tool to check if this is the right home buying scheme for you.
• Use the regional checker to confirm that you live in a recognised regional area – a requirement for the Regional First Home Buyer Guarantee.
• Check the list of 33 participating lenders and organise consultations. You may also want to seek independent financial advice.
• Speak to your lender and understand the specifics of your home loan application. For example, how soon you need to move into your home if you are purchasing an existing property.

For the purposes of the Regional First Home Buyer Guarantee, a regional area is understood as:

• Statistical Area Level 4 areas in a state or the Northern Territory that are not a capital city
• Norfolk Island, Jervis Bay Territory, Christmas Island and Cocos (Keeling) Islands

As part of this scheme, the greater capital city areas of each state, the Northern Territory and the entire Australian Capital Territory are excluded. However, these may be eligible for a separate government home loan program such as the First Home Guarantee (FHBG).

You can also enter your suburb or postcode into the regional checker to confirm if the area is considered regional.

When buying a home, borrowers are typically required to hand over a deposit worth at least 20% of the property’s purchase price. But with property prices rising at a national level, saving for this initial deposit can be a huge hurdle for potential home buyers.

You’ll usually need to pay lenders mortgage insurance if you’re unable to save up a 20% deposit, but this can add thousands of dollars to your home loan and also increase the amount of interest you’ll pay over time.

As mentioned, the Regional First Home Buyer Guarantee allows borrowers to purchase a home in a regional area with a home loan deposit as little as 5%, which makes it easier to enter the property market sooner while also removing the cost of LMI.

Under the Regional First Home Buyer Guarantee, Housing Australia acts as security on your home loan on behalf of the Australian government. In other words, Housing Australia acts as the guarantor on your mortgage.

It guarantees your home loan for up to 15% of the property’s purchase price, with the final amount depending on the size of the deposit you provide. It’s a legal arrangement – not a cash payment or deposit for your home loan.

The Regional First Home Buyer Guarantee does come with price caps which vary across the states and territories. Each price threshold is outlined in the tables below.