Regional First Home Buyer Guarantee: Your guide to a 5% deposit

Name: Loan Market Access Goulburn
Brand: Loan Market
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Key takeaways:

The First Home Guarantee scheme allows regional buyers to purchase a home with a 5% deposit because the government guarantees up to 15% of the property value to help you avoid lender's mortgage insurance.
To qualify for the guarantee, applicants must meet specific rules around citizenship, maximum income caps, previous property ownership and local regional residency.
The federal guarantee program can be combined with state-based New South Wales first home benefits, such as full or discounted stamp duty exemptions and cash grants.

Saving a deposit is one of the biggest challenges for anyone buying their first home in regional New South Wales. With rising property prices in locations like the Southern Highlands, Southern Tablelands and Central West, pulling together a 20% deposit can take many years.

If you are still deciding which of these three major corridors is right for you, it is a good idea to read our full guide on finding your dream home in Bathurst, Bowral, or Goulburn. While these hubs offer exciting potential, moving away from a metropolitan area requires a different set of due diligence steps. Following a comprehensive buying a house checklist in regional nsw can help you identify local nuances such as council flood mapping or bushfire overlays that may not be immediately obvious during a standard inspection.

The Regional First Home Buyer Guarantee was designed to help overcome this barrier. From 1 October 2025, the scheme will be replaced by the expanded First Home Guarantee, but the benefits for regional buyers remain the same – the chance to buy a home with as little as a 5% deposit while avoiding lender’s mortgage insurance (LMI).

What the Regional First Home Buyer Guarantee offers

The First Home Guarantee scheme allows eligible first home buyers in regional areas to purchase a home with a deposit of just 5%. The federal government provides a guarantee to the lender of up to 15% of the property’s value. This is not a cash payment or a grant – it simply protects the lender so the buyer does not need to pay LMI.

For many households, avoiding LMI can save thousands of dollars upfront, making ownership far more achievable in towns such as Bowral, Goulburn and Bathurst.

Who can apply

The Regional First Home Buyer Guarantee eligibility is based on a few key criteria:

Applicants must be Australian citizens or permanent residents aged 18 or older.
Income is capped at $125,000 for singles or $200,000 for couples.
Buyers need a deposit of at least 5% saved from genuine funds.
You must be a first home buyer, or not have owned property in Australia for the past 10 years.
The property purchased must be lived in as your main home.
At least one applicant must have been a resident of the regional location, or a neighbouring region, for the last 12 months.

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How the process works

The steps to use the regional home buyer scheme are straightforward:

Make sure you meet the eligibility requirements.
Work with a broker or participating lender to apply and secure your place.
Once you have approval, you’ll have a set period to choose a home and exchange contracts.
When the purchase settles, move in and establish it as your principal residence.

What counts as regional

A regional location is defined by the Australian Bureau of Statistics Statistical Area Level 4. This includes all parts of a state or territory outside its capital city, as well as Norfolk Island, Jervis Bay and the Cocos (Keeling) Islands. For buyers in the Southern Highlands, Southern Tablelands and Central West, this definition confirms that your locations are covered by the scheme.

As part of the expanded First Home Guarantee, property price caps will also increase to reflect current conditions. In New South Wales, the cap for capital cities and regional centres will rise from $900,000 to $1.5 million, while the cap for other regional locations will move from $750,000 to $800,000.

How much difference does it make?

Looking at local markets shows the scale of the benefit. In Bowral, for example, the median house value is around $1.49 million, according to Cotality. A 20% deposit would usually mean saving close to $300,000, but under the Regional First Home Buyer Guarantee a 5% deposit of about $75,000 could be enough.

In Goulburn, where the median house value is $624,000, a standard 20% deposit would be around $125,000 compared with roughly $31,000 under the regional home buyer scheme. And in Bathurst, a unit valued at $436,000 would require $87,000 upfront at 20%, but less than $22,000 if bought with the guarantee.

For first home buyers, these numbers can mean the difference between staying in the rental market and getting the keys to a home.

Other support for first home buyers

Federal and state schemes can often be combined. In New South Wales, the First Home Buyers Assistance Scheme offers a full exemption from transfer duty for homes up to $800,000, with concessional rates applying for properties between $800,000 and $1 million. For vacant land, the exemption applies up to $350,000 with concessions up to $450,000.

Buyers must also meet residence requirements, moving in within 12 months and living there for at least 12 continuous months.

What’s changing in October 2025

The expanded First Home Guarantee will replace the Regional First Home Buyer Guarantee. From that date, there will be no cap on the number of places available, income caps will be removed, price caps will be higher and regional buyers will have simpler access through a single national scheme.

How Loan Market Access can help

Understanding the rules and eligibility requirements of these schemes can be complex, particularly with the changes coming in. Loan Market Access works with buyers in Bowral, Mittagong, Moss Vale, Goulburn and Bathurst to explain the options and connect them with participating lenders.

Whether you are looking to buy your first home in the Southern Highlands, Southern Tablelands or Central West, a broker can guide you through the process and help you find a loan suited to your needs.

FAQs about the Regional First Home Buyer Guarantee

Can I use this with other grants?

Yes. The federal guarantee can be combined with state-based support such as the NSW First Home Owner Grant or transfer duty exemptions and concessions. Each program has its own rules, so it’s important to confirm eligibility for both before applying.

What kind of properties are eligible?

You can use the guarantee to buy an existing home, a newly built home, a house and land package, or an off-the-plan property. The purchase must fall under the relevant price cap and be intended as your main residence.

What happens if I stop living in the property?

The guarantee is only available for owner-occupied homes. If you move out and no longer use it as your main residence, you may no longer meet the scheme’s requirements. Always seek advice before deciding to rent out or sell.

Ready to take the next step? Speak with Loan Market Access today to explore your eligibility and start your journey towards home ownership.