If you're buying your first home in regional Australia, you may have heard of the Regional First Home Guarantee (RFHBG). On 1 October 2025 the Regional First Home Buyer Guarantee was folded into the Australian Government 5% Deposit Scheme (formerly the First Home Guarantee). It no longer exists as a separate stream, but regional buyers can still buy with a 5% deposit and no Lenders Mortgage Insurance.
- The Regional First Home Buyer Guarantee (RFHBG) is no longer a separate scheme. It was folded into the 5% Deposit Scheme on 1 October 2025
- Eligible buyers can purchase with a 5% deposit and no Lenders Mortgage Insurance (LMI), potentially saving thousands
- There are no income caps, no cap on places and no waiting list
- Regional buyers use the "rest of state" price caps for their state
Let's cut through the jargon and explain how the scheme works for regional buyers now, who qualifies, and which price cap applies.
What happened to the Regional First Home Guarantee?
The RFHBG was part of the broader Home Guarantee Scheme (HGS). On 1 October 2025 the scheme was renamed the Australian Government 5% Deposit Scheme and the regional stream was folded into it. Regional buyers now apply under the same scheme as everyone else, using the price cap for their area.
Here's the deal: Instead of needing a 20% deposit (and let's be real, who has that kind of cash lying around?), you only need 5%. The government guarantees up to 15% of the property's value, which means you can avoid paying Lenders Mortgage Insurance (LMI).
LMI can add thousands of dollars to the cost of a low deposit loan, so avoiding it can make a real difference.
Who is eligible for the 5% Deposit Scheme in regional areas?
To qualify, you need to meet these criteria:
- Be an Australian citizen or permanent resident
- Be at least 18 years old
- Intend to live in the property (not an investment)
- Have not previously owned property in Australia, or haven't owned property in the last 10 years
- Have a minimum 5% deposit saved (single parents and legal guardians may need only 2% under the Family Home Guarantee stream; lenders may require more depending on your circumstances)
Which price cap applies in regional areas?
Price caps depend on where the property is. Both the purchase price and the lender-assessed value must be at or below the cap:
- Outside the capital cities and major regional centres, the "rest of state" (or "rest of territory") cap applies
- Newcastle/Lake Macquarie and Illawarra (NSW), Geelong (VIC), and the Gold Coast and Sunshine Coast (QLD) use the higher capital city cap
The ACT has a single cap of $1,000,000 across the territory.
Tip: use the postcode tool at firsthomebuyers.gov.au to confirm the exact cap for your suburb.
What property types can you buy?
Under the 5% Deposit Scheme, you can purchase:
- Existing houses, townhouses, or apartments
- House and land packages
- Land with a separate contract to build
- Off-the-plan apartments or townhouses
Remember that property price caps apply depending on your location (see the table below).
Regional price caps from 1 October 2025
These are the price caps under the 5% Deposit Scheme. Most regional buyers use the "rest of state" column:
How to apply as a regional buyer
Ready to take the plunge? Here's how to get started:
- Check your eligibility using the information at firsthomebuyers.gov.au
- Contact a participating lender or speak with us as your mortgage broker
- Get your documentation ready (especially your latest Notice of Assessment from the ATO)
- Find your dream property within the price caps for your region
- Apply for pre-approval through a participating lender
Important: the scheme is administered by Housing Australia, but applications are made through participating lenders. A mortgage broker like us can help you apply.
Why use a mortgage broker for your 5% Deposit Scheme application?
Navigating government schemes can be confusing. As mortgage brokers, we can:
- Help determine your eligibility for the 5% Deposit Scheme and other first home buyer support
- Compare options from multiple participating lenders
- Ensure your application is properly prepared
- Guide you through the entire process from application to settlement
The bottom line
With no income caps and no cap on places from 1 October 2025, the path to homeownership in regional Australia is more accessible than it was.
With property prices continuing to challenge first home buyers, the 5% Deposit Scheme provides a realistic pathway to owning your own slice of regional Australia without waiting years to save a 20% deposit.
Frequently asked questions
Can I use the scheme for an investment property?
No, you must intend to live in the property as your principal place of residence.
What happens if property values fall and I end up with negative equity?
You're still responsible for repaying the full loan amount, regardless of property value changes.
Can I use the 5% Deposit Scheme with other government grants?
Yes, in many cases the scheme can be used alongside state-based first home buyer grants and concessions.
Do I need to pay back the government guarantee?
No, the guarantee is not a loan. It simply allows you to avoid paying LMI while having a smaller deposit.
Is the RFHBG still separate from the First Home Guarantee?
No. From 1 October 2025 the RFHBG was folded into the Australian Government 5% Deposit Scheme (formerly the First Home Guarantee), which is available nationwide. Regional buyers use the same scheme with the regional price caps.
Last reviewed: September 2026.
This information is general only and does not take your personal objectives, financial situation or needs into account. Consider whether it is right for you before acting on it. Felix Finance Pty Ltd ABN 79 664 494 615 is a credit representative (572079) of Finsure Finance and Insurance Pty Ltd, Australian Credit Licence 384704.
