In short: The Family Home Guarantee lets an eligible single parent or single legal guardian buy a home with a deposit of just 2% and pay no lenders mortgage insurance. There are no income caps, unlimited places and no waiting list. You must be an Australian citizen or permanent resident aged 18 or over, apply on your own, and live in the home. Unlike the first home buyer stream, previous owners can qualify.
Two per cent is a genuinely different number. On a $650,000 home in Melbourne it is $13,000 rather than $130,000, and it removes an insurance premium that would otherwise be added to the loan. For a parent rebuilding after a separation, this is often the only realistic route back into ownership.
Who the guarantee is for
The Family Home Guarantee sits inside the federal Home Guarantee Scheme administered by Housing Australia. It is a separate stream from the First Home Guarantee, with its own rules.
| Criterion | Requirement |
|---|---|
| Minimum deposit | 2% of the purchase price |
| Lenders mortgage insurance | None |
| Income cap | None |
| Places | Unlimited, no waiting list (since 1 October 2025) |
| Citizenship | Australian citizen or permanent resident |
| Age | 18 or older |
| Relationship status | Single: no spouse and no de facto partner |
| Children | Natural parent, adoptive parent or legal guardian of one or more dependants |
| Application | On your own. No joint applications |
| Occupancy | Owner-occupier. No investment properties |
| Other property | You must not hold any other property interest once the new home settles |
The point most people miss
You do not have to be a first home buyer. Previous ownership does not disqualify you, provided you hold no other property interest once the new home settles. That is the whole design: a parent who owned a home during a relationship, sold it as part of the settlement and now has a small cash balance and one income is exactly who this stream was built for.
What "single" means
Single means no spouse and no de facto partner. If you are separated but not yet divorced, the government's guidance is that you are not treated as single for this scheme. That timing matters and it is worth getting right before you apply rather than at approval. Our guide to separation, divorce and your mortgage covers the sequence.
What counts as a dependant
A dependent child within the meaning of the Social Security Act, or a person living with you who receives a disability support pension. You do not have to be the primary carer of every child, but the dependency relationship has to be real and documented.
Property price caps
The caps are the same as the main 5% deposit scheme, and they are the number to check before you make an offer.
| Location | Price cap |
|---|---|
| NSW: Sydney, Newcastle, Lake Macquarie, Illawarra | $1,500,000 |
| NSW: rest of state | $800,000 |
| VIC: Melbourne and Geelong | $950,000 |
| VIC: rest of state | $650,000 |
| QLD: Brisbane, Gold Coast, Sunshine Coast | $1,000,000 |
| QLD: rest of state | $700,000 |
| WA: Perth | $850,000 |
| WA: rest of state | $600,000 |
| SA: Adelaide | $900,000 |
| SA: rest of state | $500,000 |
| TAS: Hobart | $700,000 |
| TAS: rest of state | $550,000 |
| ACT | $1,000,000 |
| NT | $600,000 |
Mickleham, Craigieburn, Kalkallo, Wollert and Sunbury all sit inside Greater Melbourne, so the $950,000 cap applies. Push north past Wallan and the regional $650,000 cap takes over. Check your suburb with the eligibility calculator before you bid.
Worked example: a $650,000 home in Melbourne
Sarah is a permanent resident, works full time in aged care, and has two children living with her. She and her former partner sold the family home; her share of the settlement is around $30,000.
The deposit
- Purchase price: $650,000
- Deposit at 2%: $650,000 × 0.02 = $13,000
- Loan: $650,000 − $13,000 = $637,000
- Lenders mortgage insurance: nil
What the LMI would otherwise have cost
Most lenders will not write a 98% loan at all without a guarantee behind it. Where a 95% loan is available on a $650,000 purchase, the LMI premium is indicatively around $26,000, usually capitalised onto the loan. At 98% LVR, if an insurer would take it, the premium would be higher again. So the guarantee saves both the insurance and the 3% of price she does not have to find. Model premiums in the LMI calculator.
The repayment
For illustration, at 6.00% p.a. over 30 years on $637,000, the principal and interest repayment is about $3,819 a month. Compare that with the same purchase at other deposit levels:
| Deposit | Loan | Monthly repayment at 6.00% p.a. | LMI |
|---|---|---|---|
| 2% ($13,000), Family Home Guarantee | $637,000 | about $3,819 | Nil |
| 5% ($32,500) | $617,500 | about $3,703 | About $26,000 if not guaranteed |
| 10% ($65,000) | $585,000 | about $3,507 | About $13,000 |
| 20% ($130,000) | $520,000 | about $3,118 | Nil |
The rest of the cash she needs
Because Sarah has owned before, she does not get the Victorian first home buyer duty exemption. On $650,000 the general rate is $2,870 plus 6% of the amount above $130,000, so $2,870 + $31,200 = $34,070. Add conveyancing and inspections of about $2,500 and registration fees of about $1,500.
- Deposit $13,000 + duty $34,070 + costs $4,000 = about $51,070
Her $30,000 does not cover it. This is the real lesson of the scheme: the 2% deposit is the easy part, and stamp duty is usually the binding constraint. Buying a new home under $750,000 that has never been occupied, or looking at a price point where duty is lower, changes the picture. Run your own numbers in the stamp duty calculator and the upfront costs calculator.
Serviceability on one income
The guarantee removes the deposit barrier. It does not remove the income test, and this is where most single-parent applications actually turn.
- Lenders assess you at your rate plus 3 percentage points. On a $637,000 loan at 6.00%, you must show you could service roughly $5,127 a month at 9.00%.
- Child support and family tax benefit can often be counted, with conditions on the children's ages and on evidence of regular receipt. Policy varies widely. See Centrelink and family payments as income.
- Childcare costs, school fees and a single-income household benchmark all sit on the expense side.
- Credit card limits count at their limit, not their balance. Closing an unused card can add meaningful borrowing capacity.
Test your position with the borrowing power calculator, then get a broker to check it against a lender that treats maintenance income sensibly.
How to apply
You cannot apply to Housing Australia directly. The guarantee is arranged by a participating lender alongside your loan.
- Confirm eligibility, including the single test and the dependant test.
- Get pre-approval with a participating lender and have the guarantee place reserved.
- Find a property within the price cap and sign the contract inside the reservation window.
- Settle, move in, and hold no other property interest from that point.
Read home loan pre-approval for what the lender will want, and the documents checklist for the paperwork.
Frequently asked questions
Can I use the Family Home Guarantee if I have owned a home before?
Yes. This is the main difference from the first home buyer stream. Previous ownership does not disqualify you, provided you do not hold any other property interest once the new home settles. If your name is still on a former matrimonial home, that has to be resolved before or at settlement of the new purchase.
Is there an income limit for the Family Home Guarantee?
No. There are no income caps and, since 1 October 2025, unlimited places with no waiting list. Your income still determines how much a lender will approve, because the guarantee only removes lenders mortgage insurance. It does not change the serviceability assessment, which applies a 3 percentage point buffer over your actual rate.
Do I have to be divorced to qualify?
You must be single, meaning no spouse and no de facto partner. The government's guidance is that being separated but not divorced does not make you single for this scheme. If you are mid-separation, sequence the divorce or the property settlement before you apply rather than discovering the problem at assessment.
Can I apply with my new partner or a family member?
No. Applications must be made on your own. There are no joint applications under this stream, and the property must be in your name as an owner-occupier. If you want to buy with someone else, look at the First Home Guarantee (if you both qualify) or a guarantor loan instead.
What if the property I want is above the price cap?
The guarantee simply is not available on that purchase. There is no partial application. Your options are to negotiate below the cap, look at a different suburb inside the same cap band, or buy with a larger deposit and pay LMI. A broker can tell you which cap band a suburb falls into before you spend a weekend at open homes.
Talk to GNT Finance
Buying on one income after a separation is as much a sequencing problem as a lending problem, and getting the order right saves months. Gorakh Timilsina spent years as a senior credit officer reading applications from the approving side of the desk, and he will tell you straight whether the numbers work before you spend money on inspections. There is no cost to you for our home-loan service in most cases.
Book a free consultation or call 0426 403 703.
Written by Gorakh Timilsina
Founder, CEO & Senior Mortgage Consultant at GNT Finance. Gorakh started as a broker assistant, spent years as a senior credit officer assessing loan applications, and now helps Melbourne families get the right loan approved. English, Nepali and Hindi spoken.