The First Home Guarantee for Self-Employed Buyers

Self-Employed | 29 Apr, 2022

In today’s market, one of the hardest hurdles to getting into a new home is saving your deposit. High property prices mean that saving 20% or even 10% can take many years, and then you may still be required to get lender’s mortgage insurance, another cost.

Saving for your deposit can be even harder when you’re a self-employed first home buyer. Fluctuating income, tax requirements and the need to keep a strong working capital base puts pressure on your finances that makes pulling out extra funds for a home loan deposit even more difficult.

But there is help in the form of the first home guarantee.

Your Guide to the First Home Guarantee Scheme

What is the First Home Loan Deposit Scheme?

Officially known as the First Home Loan Deposit Scheme, the first home guarantee is a federal government initiative launched in the last financial year. It was created to support eligible first home buyers to purchase their first home sooner by helping get on the property ladder with a smaller deposit.

Lending institutions generally require buyers to have a 20% deposit to purchase a property. Under the first home guarantee, a first-time home buyer can have between a 5% and 20% deposit and still buy a home. In that case, the federal government effectively steps in to ‘guarantee’ the deposit balance, up to a maximum amount of 15% of the property value (as assessed by your lending institution).

This is a fantastic advantage to those buyers struggling to pull together a deposit for their first home. Even better, under the scheme there’s no requirement to pay lenders’ mortgage insurance on the balance.

2022-23 Expansion

From July 2022, the 2022-23 expansion will come into effect. Under the expanded scheme, the government will increase the maximum purchase price (or ‘price caps’) allowed (singles taxable income up to $125,000 and couples taxable income up to $200,000). It’ll also expand the number of places from 10,000 to 35,000, with an additional 10,000 available in regional areas. Even better, now it can apply to both new and existing homes.

What sort of property can I buy under the scheme

For a property to be eligible under the first home guarantee, it must be a ‘residential property’. This includes:

  • An existing house, townhouse or unit.
  • A house and land package.
  • Land and a separate contract to build a house.
  • An off-the-plan unit or townhouse.

Specific dates and requirements apply to each property type. Our team is happy to talk you through what’s involved with each.

What are the benefits and weakness of the scheme

Over the past years, median property prices in Brisbane have moved further out of reach of first home buyers. This is particularly true for self-employed buyers. With a saturated rental market, this has placed significant pressure on those trying to purchase their first home.

It can be argued that the scheme will place increased pressure on the limited pool of residential properties within the maximum price caps. However, economists are predicting that residential house prices will have peaked by the end of the year, and anticipate values to drop by around 8% by the end of 2023.

However, the first home guarantee scheme will enable first home buyers on a middle income to potentially cut the length of time needed to save for a deposit, while also avoiding lenders mortgage insurance.

An additional benefit is that pressure is removed from families of some first home buyers, who have increasingly been filling the role of guarantor.

Self-Employed First Home Buyers

For self-employed first home buyers, the first home guarantee offers a port in the home buying storm.

For an eligible first home buyer in Greater Brisbane, the increased price cap means that a residential property can be purchased for a $35,000 deposit (5%). If you are a self-employed tradesperson, this is a particularly attractive situation. You could purchase your first home under the scheme with a $35,000 deposit. Then you could invest a further say, $20,000 in improving its value, and make a tax-free capital gain.

For self-employed first home buyers, avoiding LMI and getting a foot in the door without a full 20% deposit can mean the difference between owning your own home, and staying in the rental game.

Is the first home guarantee for you?

If you are a first home buyer looking to purchase a residential property in Greater Brisbane, now is a great time to get started. As self-employed buyers start by:

  • Getting your financials in order
  • Enlisting the help of your bookkeeper
  • Saving as much as you can
  • Keeping a paper trail
  • Speaking to an expert finance broker

Our team at Stapleton Finance are experts on financing for self-employed buyers and we’re here to help.

If you’re looking for a trustworthy broker who will get to know you and your unique situation, contact us.


This article is intended to provide commentary and general information only. It should not be relied upon as financial advice. It is always best to speak with your own financial adviser or accountant. You should seek formal financial advice if you have a particular matter of interest arising from this article.

Sharing is caring!

Related Content

First Home Buyer’s Guide for 2024 | Part 3

Welcome back to this third and final instalment of our First Home Buyer’s Guide for 2024. In parts 1 and Part 2 we covered a lot of considerations that could help you achieve your goal of buying a home in 2024. From understanding the government schemes available, to finding ways to increase your savings, our tips […]

Read More

Get a leg up the property ladder with LongView’s Buying Boost

LongView Buying Boost helps you get on the property ladder by ‘boosting’ your equity and helping you through the buying process. Here’s how! The ‘great Australian dream’ has long been for every Australian family to own their own home. But unfortunately it’s not always as simple today as it may have been 20, 30 or […]

Read More

Your Guide to the New First Home Guarantee Scheme

Does buying your first home feel like an impossible dream? Given the current state of the market and the cost-of-living crisis, it’s not surprising that many aspiring first home buyers feel like their first property is out of reach. Fortunately, the Australian Government has offered new hope to those who wish to purchase their first […]

Read More