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The First Home Guarantee is one of the most valuable tools available to first home buyers in South Australia. It allows eligible buyers to purchase a home with as little as 5% deposit - without paying Lenders Mortgage Insurance. Here is everything you need to know.
By Jason Given · January 2026 · 6 min read
Under the First Home Guarantee, the federal government acts as a guarantor for up to 15% of the property's value. This means your lender sees the loan as if you have a 20% deposit - even though you only have 5% - and does not require you to pay LMI.
The guarantee is not money you receive. It is a commitment from the government to cover the lender's risk on the portion between your deposit and 20% of the purchase price. You still need to save your 5% deposit and cover upfront costs separately.
To be eligible for the First Home Guarantee you must be an Australian citizen or permanent resident, be a first home buyer (meaning you have never owned residential property in Australia), meet the eligibility criteria (income caps were removed from 1 October 2025), and intend to live in the property as your primary residence.
The property must also be within the applicable price cap. In South Australia the cap is $900,000, which covers the vast majority of properties in greater Adelaide.
The scheme covers existing properties, new builds, house and land packages, off-the-plan apartments and townhouses. The property must be in Australia and meet standard lender lending criteria. Investment properties do not qualify - the scheme is specifically for owner-occupiers.
The First Home Guarantee is accessed through participating lenders - not directly through the government. Lendology works with multiple participating lenders and manages the application as part of your home loan process. We check your eligibility, identify the participating lender offering the best terms for your situation, and submit the guarantee application alongside your loan application.
From 1 October 2025, places in the scheme are unlimited - there is no longer a cap on the number of guarantees issued each financial year. Having your paperwork prepared in advance still helps ensure a smooth application.
South Australian first home buyers may also be eligible for stamp duty concessions on top of the First Home Guarantee. These two benefits can be combined, significantly reducing the upfront cost of entering the market. Lendology confirms all available incentives for your specific situation before you apply.
From 1 October 2025, places in the scheme are unlimited. There is no cap on the number of guarantees issued each financial year.
No. The scheme requires you to occupy the property as your primary place of residence. It cannot be used for investment purposes.
The guarantee is released when you sell and the loan is repaid. If at the time of sale your loan-to-value ratio has reduced below 80% (because you have paid down the mortgage or the property has increased in value), the guarantee may be released earlier.
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