What is the Family Home Guarantee?
The Family Home Guarantee was the name of the single parent part of the Australian Government's home buyer scheme. It is now called the Australian Government 5% Deposit Scheme for single parents (some lenders still call it the Single Parent Stream or the Family Home Guarantee). It is administered by Housing Australia.
It lets an eligible single parent or single legal guardian buy a home with a deposit of as little as 2%, without paying Lenders Mortgage Insurance (LMI). The government guarantees part of your loan to the lender (up to 18% of the property value), so the lender can treat the loan much as if you had a 20% deposit. You still borrow the full amount and make all the repayments yourself.
Last checked against firsthomebuyers.gov.au: October 2026.
What changed on 1 October 2025
From 1 October 2025 the scheme was expanded. For single parents this means:
- No income cap - the old $125,000 income limit no longer applies
- Unlimited places and no waiting list - you no longer need to wait for, or reserve, a place
- Higher property price caps - see the table below
If you were told before October 2025 that you earned too much, or that the price cap in your area was too low, it is worth checking again.
Who is eligible?
To use the scheme as a single parent, you must:
- Be a single parent or single legal guardian of at least one dependent child
- Be an Australian citizen or permanent resident, aged 18 or over
- Have saved a deposit of at least 2% of the property value (and less than 20%)
- Not own, or hold an interest in, any other property once your new home settles (you can have owned property before)
- Buy a home to live in yourself - investment properties are not eligible
- Apply on your own, with an owner-occupier, principal and interest home loan from a participating lender
- Buy a property priced at or below the price cap for that location
You also need to meet the lender's normal credit and borrowing rules. Being eligible for the scheme does not guarantee loan approval.
Separated but not yet divorced?
This catches many people out. Under the scheme rules, if you were married and are separated but not yet divorced, you still have a spouse and are not eligible. Once your divorce order takes effect you can apply. If you were in a de facto relationship, you are treated as single once you are no longer living together as a couple.
In Australia you generally need to have been separated for at least 12 months before you can apply for a divorce, so it pays to plan the timing of your purchase with your family lawyer and with us.
This is NOT a first home buyer scheme
Unlike the First Home Owner Grant, you can use the single parent scheme if you have previously owned property. What matters is that you do not hold any other property interest once your new home settles. This makes it particularly useful for separated parents who owned a home with their ex-partner and need to buy again after settlement.
The scheme rules also allow for one common separation scenario: if you currently own the home jointly (for example with your former partner) and the new loan will make you the sole registered owner of that same property, that interest does not stop you being eligible. Whether a buyout loan can be structured this way depends on the lender and your settlement terms, so talk to us before you sign anything.
If you sold the family home as part of your property settlement and walked away with limited equity, the scheme could help you buy again with a 2% deposit.
Property price caps
Both the purchase price and the lender's valuation must be at or below the cap for the location. These are the caps that apply from 1 October 2025:
| State or territory | Capital city and regional centres | Rest of state |
|---|---|---|
| New South Wales | $1,500,000 | $800,000 |
| Victoria | $950,000 | $650,000 |
| Queensland | $1,000,000 | $700,000 |
| Western Australia | $850,000 | $600,000 |
| South Australia | $900,000 | $500,000 |
| Tasmania | $700,000 | $550,000 |
| Australian Capital Territory | $1,000,000 (all areas) | |
| Northern Territory | $750,000 (Darwin) | $600,000 |
Regional centres are the Central Coast, Coffs Harbour - Grafton, Illawarra, Mid North Coast, Richmond-Tweed and Newcastle and Lake Macquarie (NSW), Geelong (VIC), and the Gold Coast and Sunshine Coast (QLD). Caps are set by the Australian Government and can change. Check the exact cap for a suburb and postcode with the official price cap tool. Source: firsthomebuyers.gov.au, checked October 2026.
How much could you save?
On a $600,000 home, a 2% deposit is $12,000. Without the guarantee, most lenders would want at least a 5% deposit ($30,000), and with less than 20% you would normally pay Lenders Mortgage Insurance - often thousands or tens of thousands of dollars, depending on the loan size and deposit. With the guarantee, there is no LMI.
Compare this to saving a 20% deposit ($120,000). The scheme can get you into a home with $12,000 plus purchase costs such as stamp duty and legal fees. A smaller deposit does mean a bigger loan, so higher repayments and more interest over time - we will show you the numbers side by side.
How to apply
You cannot apply to the government directly. Applications go through a participating lender as part of your home loan application.
- Check your eligibility - we look at your relationship status, dependants, deposit and borrowing capacity
- Get pre-approved - we apply with a participating lender. You will need proof of citizenship or residency, documents showing you are a single parent or legal guardian, and a Home Buyer Declaration
- Find your property - once pre-approved you have 90 days to find a home and sign a contract, at or below the price cap for that area
- Settle and move in - you need to move in within 6 months and keep living there as an owner-occupier to keep the guarantee
Frequently asked questions
Can I use the scheme if I owned a home with my ex?
Yes. The scheme is not limited to first home buyers. If you previously owned a home jointly with your ex-partner and will not hold any other property interest once your new home settles, you may be eligible. If you were married, your divorce needs to be final before you can apply. This is one of the most common scenarios we help with.
Can I combine the scheme with the First Home Owner Grant?
Possibly. If you have never owned a home before and you are buying or building a new home, you may be able to use both the scheme (2% deposit, no LMI) and your state's First Home Owner Grant. Grant rules differ by state, and most people who owned the family home with an ex will not qualify for the grant.
What if I receive child support or Centrelink payments?
Lenders treat these payments differently. Some count documented child support and Family Tax Benefit in full, some count only part of it, and some do not count it at all. Most only count it while your youngest child is below a set age (commonly somewhere between 10 and 16, depending on the lender), because the payments stop as children grow up. Centrelink payments on their own are rarely enough to support a home loan, which is why lender choice matters. See child support and borrowing capacity.
Are places limited?
Not any more. Since 1 October 2025 there is no limit on the number of places and no waiting list.
Which lenders participate?
Major banks and a number of smaller banks and non-bank lenders participate. Housing Australia publishes the list of participating lenders. As a broker, we can compare participating lenders and find a product that suits your situation.