First Home Guarantee 2026: No Income Caps — What Every Melbourne Buyer Must Know

If you've ever looked at the First Home Guarantee and been put off by the annual place limits or income caps — that's no longer an issue. Since 1 October 2025, the Australian Government removed both the income threshold and the cap on places available, meaning any eligible first home buyer in Melbourne or Geelong can now access the scheme regardless of their income or when they apply.

This is one of the most significant changes to first home buyer support in years. Combined with the higher property price cap of $950,000 for Melbourne and Geelong, it opens the door to thousands of buyers who previously missed out. Here's everything you need to know to use it.

What Is the First Home Guarantee and How Has It Changed?

The First Home Guarantee (formerly the First Home Loan Deposit Scheme) is an Australian Government initiative administered by Housing Australia. It allows eligible first home buyers to purchase a property with as little as a 5% deposit without paying Lenders Mortgage Insurance (LMI). The government guarantees up to 15% of the property's value, removing the need for LMI — a saving that can easily run to $15,000–$35,000 on a Melbourne purchase.

The scheme has been around since 2020 but was previously restricted by two significant barriers: an annual cap on available places (which would run out early in each financial year) and income limits that excluded buyers earning above $125,000 as an individual or $200,000 as a couple. Both of these restrictions were removed from 1 October 2025. This followed a commitment in the 2025 election to make the scheme universally accessible to first home buyers.

Who Is Now Eligible for the First Home Guarantee?

With income caps gone, the eligibility rules are much simpler. To qualify for the First Home Guarantee in 2026, you must:

• Be an Australian citizen aged 18 or over
• Be a first home buyer — you must not have previously owned or co-owned a residential property in Australia (permanent residents are not eligible for the First Home Guarantee, though they may be eligible for other schemes)
• Intend to live in the property as your principal place of residence — investment properties are not eligible
• Purchase a property at or below the price cap for your location (see table above)
• Apply through a participating lender authorised by Housing Australia

Importantly, the income test has been completely removed. Whether you earn $60,000 or $250,000, the First Home Guarantee is available to you — provided you meet the other criteria and purchase within the price cap. There is no means testing, no forms proving your income level to the scheme, and no risk of missing out because you earn too much.

What Are the Property Price Caps for Melbourne and Geelong?

While income caps are gone, property price caps still apply and vary by location. For Melbourne and Geelong buyers in 2026, the caps are:

• Melbourne (all postcodes): $950,000
• Geelong (regional centre): $950,000

This is a significant increase from the old $800,000 (Melbourne) and $650,000 (Geelong) caps. The increase brings the scheme in line with current market realities — the median house price in Melbourne's middle-ring suburbs regularly exceeds the old cap. With $950,000 now available, buyers in suburbs like Brunswick, Moonee Ponds, Essendon, and across the inner north and west have far more choice.

The cap applies to the total purchase price of the property, not the loan amount. So if you're buying a $900,000 property with a 5% deposit ($45,000), your loan would be $855,000 — and the government guarantee covers the gap between your 5% and 20%.

First Home Guarantee vs Help to Buy: What's the Difference?

The First Home Guarantee and the Help to Buy shared equity scheme are two separate government programs and are frequently confused. Here's how they differ:

The key difference: under the First Home Guarantee, you own 100% of your property from day one. The government simply guarantees the portion between your deposit and 20% — it takes no share of your equity and receives no return when you sell. Help to Buy involves the government as a co-owner, which means a lower deposit requirement but a more complex arrangement when you eventually sell or want to buy out the government's share.

For most Melbourne buyers, the First Home Guarantee is simpler and more beneficial — particularly given its higher property price cap and the fact it is fully operational now.

What Types of Properties Are Eligible?

The First Home Guarantee applies to a range of property types, giving buyers flexibility. Eligible properties include:

• Existing homes (established houses, townhouses, units)
• Newly built homes (house and land packages, off-the-plan apartments)
• Vacant land with a construction contract for a new build
• House and land packages where land and construction contracts are separate

The property must be owner-occupied — you must intend to live in it as your principal place of residence. Investment purchases and holiday homes are excluded. There are no restrictions on whether the property is freehold, strata title, or leasehold, provided it meets standard lender requirements.

How to Apply for the First Home Guarantee in Melbourne — Step by Step

You cannot apply directly to Housing Australia. Applications must go through a participating lender, and a mortgage broker can submit on your behalf across multiple lenders to find the best fit. Here's how the process works in practice:

1. Check your eligibility — confirm you're a first home buyer, Australian citizen, and intending to owner-occupy
2. Get pre-approval — speak with a mortgage broker who will assess your borrowing capacity and identify which participating lenders suit your situation
3. The broker confirms your First Home Guarantee eligibility with the chosen participating lender
4. Reserve your guarantee — once the lender confirms eligibility, a guarantee is reserved in your name (no charge)
5. Find your property — purchase within the price cap and proceed to formal approval
6. Settlement — the guarantee is applied at settlement, replacing the need for LMI

Working with a broker rather than going direct to a single bank is particularly valuable here because not every participating lender offers the same rates, fees, or loan features. A broker can compare all eligible lenders simultaneously and present the First Home Guarantee alongside other first home buyer assistance — including Victoria's stamp duty concessions and the $10,000 First Home Owner Grant (for new builds). Find out more about our dedicated first home buyer loan services.

Other First Home Buyer Support Available in Victoria in 2026

The First Home Guarantee doesn't operate in isolation. Melbourne and Geelong buyers may be eligible to stack it with other support:

• First Home Owner Grant (FHOG): $10,000 cash grant for first home buyers purchasing or building a new home valued under $750,000. Available in Victoria and can be applied to your deposit.
• Stamp duty exemption: Full exemption from stamp duty for first home buyers purchasing an established property valued up to $600,000. Concessions apply on a sliding scale up to $750,000.
• First Home Super Saver Scheme (FHSS): Allows first home buyers to withdraw voluntary superannuation contributions (up to $50,000 total) to use as a deposit, with tax advantages.
• Principal place of residence (PPOR) rates: Lower council rates and land tax treatment for owner-occupied properties.

A good mortgage broker will help you identify which combination of these measures applies to your situation. Used together, these schemes can significantly reduce the upfront cash you need at settlement.