Family Home Guarantee Sydney in Sydney

The Family Home Guarantee (FHG) is an Australian Government scheme specifically designed for single parents and single legal guardians raising at least one dependent child. It lets eligible buyers purchase a home with as little as a 2% deposit and zero Lenders Mortgage Insurance (LMI), with Housing Australia guaranteeing up to 18% of the property value to the participating lender.

Before October 2025, the FHG was constrained by a $900,000 Sydney price cap and a $125,000 income cap for single parents, with limited annual places. Since 1 October 2025, the Sydney price cap has increased to $1,500,000, income caps have been removed, and 5,000 places are available for the 2025–26 financial year. For single parents in Sydney and the Hills District, that change unlocks properties that were previously out of reach.

For many households, the combined impact of a 2% deposit and no LMI represents a saving of $30,000–$100,000+ in upfront costs compared with a traditional 20% deposit path. The challenge is understanding the scheme rules and aligning them with real‑world lending policies. That is where a specialist broker adds value.

The FHG is administered by Housing Australia as the single parent stream of the broader Australian Government 5% Deposit Scheme. It is a guarantee, not a cash grant.

How the guarantee replaces LMI: Under a normal loan, lenders charge LMI when your deposit is below 20% of the property value. On a $700,000 home with a 2% deposit ($14,000), LMI would often be around $35,000–$50,000. Under the FHG, the government guarantees up to 18% of the property value to your lender. From the lender’s perspective, your 2% deposit plus the 18% guarantee effectively equals a 20% deposit. Because of that guarantee, LMI is not charged at all.

Crucially, the government is not contributing to your deposit in cash and does not co‑own the property. You remain responsible for the entire loan. The guarantee is a legal promise to the lender that reduces their risk if the property has to be sold and does not fully cover the outstanding debt.

Key October 2025 changes for the FHG:

• Sydney price cap increased to $1,500,000. This brings a majority of Sydney properties, including many townhouses and houses in the Hills District and Greater Western Sydney, within FHG reach.
• Income cap removed. The previous $125,000 income cap for single parents has been removed for applications from 1 October 2025, based on firsthomebuyers.gov.au guidance and major lender interpretation. Higher‑earning single parents can now access the scheme, subject to normal lender serviceability checks.
• Places clarified. The FHG retains 5,000 places nationally in 2025–26, unlike the 5% Deposit Scheme which is now unlimited. That makes timing and early application important.

The FHG has detailed personal eligibility rules. Every box needs to be ticked for your application to be accepted.

Single parent or single legal guardian

• You must be single at the home loan date – no spouse and no de facto partner. Living with a partner on a genuine domestic basis generally counts as de facto, even if you are not married.
• Separated but not yet divorced does not count as single. Under housing-australia rules, if you are still legally married and have not finalised your divorce, you are not considered single for FHG purposes.
• You must be the natural, adoptive or legal guardian of at least one dependent child. Legal guardians can include grandparents, aunts, uncles or other relatives with a formal guardianship order.

Dependent children

A dependent child is generally a child you are legally responsible for, who lives with you and is substantially dependent on you. For older children, there are income thresholds and specific rules. In practice, if you have day‑to‑day care, custody and financial responsibility, there is a strong chance they meet the scheme’s definition of dependent – but this should be checked carefully against current Housing Australia guidance.

Citizenship, age and ownership history

• You must be at least 18 years old.
• You must be an Australian citizen or permanent resident. Temporary visas are not eligible.
• You must not currently own property at the time the new loan settles. Previous ownership is allowed as long as you have disposed of all property interests before settlement.
• You must apply on your own – only one applicant can be on the loan and title under the FHG.

The FHG covers a broad set of owner‑occupied property types, as long as they sit under the price cap for their location and meet residency rules.

Eligible property types

• New or existing houses, townhouses and apartments.
• Off‑the‑plan purchases.
• House and land packages.
• Vacant land with a separate building contract (where the combined land price plus build cost is within the cap).

All properties must be in Australia, be residential in nature, and be intended as your principal place of residence – investment properties are not eligible.

NSW price caps from 1 October 2025

Both the purchase price and the lender's assessed value must sit at or below these caps. For vacant land plus a building contract, the combined cost must not exceed the relevant threshold.

The FHG headline is simple: you can buy with a 2% deposit and no LMI. In practice, you still need to budget for the full set of purchase costs.

Deposit examples

• $700,000 purchase – 2% deposit: $14,000.
• $1,000,000 purchase – 2% deposit: $20,000.
• $1,500,000 purchase (Sydney cap) – 2% deposit: $30,000.

Most lenders will want to see that this deposit has been built up as genuine savings over time, though there are exceptions for funds from a property settlement, inheritance or FHSS releases.

Other upfront costs

• Stamp duty: In NSW, FHBAS can fully or partially reduce duty for eligible first home buyers up to certain thresholds, but at higher FHG price points full duty applies. On a $1.1M Sydney home, stamp duty can be around $44,000 without concessions.
• Legal and conveyancing fees: typically $1,500–$3,000.
• Building and pest inspection: $400–$800 for established properties.
• Lender fees: some lenders charge application, settlement or package fees.

We model all of these costs with you so the total cash required at settlement – not just the 2% deposit – is clear before you start making offers.

Lenders Mortgage Insurance is one of the biggest hidden costs of buying with a low deposit. The FHG removes it completely.

Indicative LMI costs with a 2% deposit (without the FHG)

Figures drawn from multiple lender and broker calculator examples (including Westpac‑linked references and independent broker estimates) and are indicative only. Actual LMI depends on lender, insurer and your profile.

Under the FHG, all of this LMI is removed. The government guarantee replaces the insurer’s role and the premium never appears on your loan. For a single parent, that difference can be equivalent to several years of school fees or a major buffer in your household budget.

The FHG and the First Home Guarantee both sit under the Australian Government 5% Deposit Scheme umbrella, but they serve different buyers.

For eligible single parents with dependent children, the FHG is usually more powerful because of the lower deposit and the ability to re‑enter the market after a relationship breakdown. For single buyers without dependent children, or couples, the 5% Deposit Scheme is the relevant pathway.

The FHG can often be combined with state and federal support to significantly reduce upfront costs. The exact mix depends on whether you are a first home buyer and whether you are buying a new or established home.

• FHG + NSW FHBAS (stamp duty exemption or concession): For eligible first home buyers purchasing under $800,000, FHBAS can fully remove stamp duty; between $800,001 and $999,999 it provides a concession. Combined with LMI savings from the FHG, the total government support can be substantial.
• FHG + FHOG ($10,000) on new homes: If you are buying or building a qualifying new home under FHOG caps, you may also receive the $10,000 First Home Owner Grant, on top of the FHG and any FHBAS entitlement.
• FHG + FHSS: The First Home Super Saver Scheme lets you draw voluntary contributions from super to boost your deposit. Those funds can be used alongside the FHG to reach the 2% deposit plus costs faster.
• FHG vs Help to Buy: You cannot combine the FHG with Help to Buy on the same purchase. Help to Buy is a shared‑equity scheme where the government co‑owns up to 30–40% of the property. The right choice depends on your income, target price and how comfortable you are with co‑ownership. We model both options if you qualify for each.

The FHG is accessed through participating lenders, not directly from Housing Australia.

1. Check eligibility: Use the official online tools and speak with a broker to confirm that your personal circumstances, dependent children, and ownership history align with FHG rules.
2. Prepare documentation: Gather ID documents, evidence of single parent or legal guardian status (such as birth certificates or guardianship orders), income documents (payslips, tax returns), bank statements showing genuine savings, and details of any child support or Centrelink payments.
3. Choose a participating lender: Work with a broker who understands which participating lenders are most favourable to single parent borrowers and how they treat different income sources.
4. Apply and secure pre‑approval: Your chosen lender submits your application to Housing Australia to reserve an FHG place and issues a pre‑approval while you search for a property.
5. Find a qualifying property: Search within the relevant price caps, confirm that the property type is eligible, and obtain building & pest inspections where appropriate.
6. Exchange and settle: Once your offer is accepted, your solicitor handles contracts and any stamp duty support. At settlement, the government guarantee activates and LMI is waived.

For many eligible single parents in Sydney and the Hills District, the FHG is one of the most powerful tools available for re‑entering or entering the market. But it does come with trade‑offs that should be weighed carefully.

• Pros: Very low deposit requirement (2%), large LMI savings (often $35,000–$70,000+), and the ability to buy sooner rather than spending years saving a 20% deposit while prices move.
• Cons: High loan‑to‑value ratio (98% LVR) means higher repayments and more sensitivity to interest rate rises. In a falling market you may temporarily have limited equity.
• Reality check on repayments: On a $700,000 home with a 2% deposit and a 30‑year principal and interest loan at current variable rates, repayments can be in the vicinity of $3,800–$4,200 per month. At $1,000,000 or more, the monthly commitment increases accordingly.

Our role is not to push you to the maximum loan size, but to test what is truly sustainable on a single income and to show clearly what the trade‑offs look like over time.

Single parent applications are more complex than standard owner‑occupier loans, even with a generous scheme in place.

• Single income serviceability: Lenders must be satisfied that your single income can sustain repayments on a 98% LVR loan, even under higher assessment rates. We prioritise lenders whose policies are favourable to single parent households.
• Child support and Centrelink income: Different lenders treat child support, Family Tax Benefit and other payments very differently. Some include 100% of these payments; others heavily discount or ignore them. Choosing the right lender can dramatically change borrowing power.
• Genuine savings evidence: Many FHG lenders want to see three months or more of consistent savings behaviour. We help structure your accounts and documentation so this story is clear.
• Separation and custody documentation: Where relationships have recently ended, clear documentation around separation and custody helps satisfy lenders and Housing Australia that you meet the single and dependent child criteria.

At RyRo Loan Centre in Norwest, we work with single parents and legal guardians across the Hills District, Western Sydney and greater Sydney on Family Home Guarantee applications every week.

• We assess the whole picture up‑front. We do not just check FHG eligibility in isolation; we map out which other schemes you can combine, your realistic price range, and what a sustainable repayment looks like.
• We know which participating lenders suit single parents best. Policies towards child support, Family Tax Benefit and casual or part‑time work vary widely. Our experience means we can narrow the field quickly.
• We manage the paperwork. You provide the documentation; we package the application, liaise with the lender and Housing Australia, and coordinate with your solicitor or conveyancer.
• We are local. Our team is based in the Hills District and understands the specific price points, suburbs and new developments where FHG support and NSW concessions bite hardest.
• $0 broker fees. You do not pay us for our services – we are paid by the lender at settlement, and under Best Interests Duty we are legally required to recommend options that are in your best interest.

If you are a single parent or single legal guardian in Sydney, the Hills District or anywhere in NSW and you are wondering whether the Family Home Guarantee could work for you, the best next step is a conversation.

In a 30–45 minute call we can clarify:

• Whether you meet the current FHG eligibility rules.
• What price range you can realistically target on your income.
• How much deposit you truly need once all costs are factored in.
• Which schemes you can stack with the FHG (FHBAS, FHOG, FHSS) and whether Help to Buy is a better fit.
• Which participating lenders offer the strongest combination of policy and rate for your situation right now.

There is no cost, no obligation and no credit check for this initial assessment.