Last updated: April 2026
First Home Guarantee vs Help to Buy — Which Is Better?
The First Home Guarantee (FHBG) and Help to Buy are the two main federal schemes that help you buy with a small deposit, but they work very differently. The FHBG lets you buy with 5% and avoid LMI while keeping 100% ownership. Help to Buy requires just 2% deposit and slashes your mortgage, but the government takes an equity stake and shares in future capital gains. These schemes cannot be used together, so you must choose one.
Side-by-Side Comparison Calculator
Side-by-Side Comparison
| Feature | First Home Guarantee | Help to Buy |
|---|---|---|
| How it works | Government guarantees your loan (no LMI) | Government buys equity share in your home |
| Minimum deposit | 5% | 2% |
| You own | 100% of the property | 60-70% (government owns the rest) |
| Capital gains | 100% yours | Shared proportionally with government |
| Income cap | None (removed Oct 2025) | $100k single / $160k couple |
| Annual places | Unlimited (removed Oct 2025) | 10,000 per year |
| Citizenship | Citizens + permanent residents | Citizens only |
| Available states | All 8 states/territories | All states except TAS |
| Participating lenders | 30+ lenders (most major banks) | CBA and Bank Australia only |
| Property types | New and existing homes | New and existing homes |
| Can rent out? | No (must be principal residence) | No (must be principal residence) |
| Equity share ongoing | N/A — you own 100% | Must buy back if income exceeds cap for 2 years |
When FHBG Is Usually Better
- You can save a 5% deposit (or use FHSS to get there)
- Your income is above $100,000 (not eligible for Help to Buy)
- You expect strong capital growth in your area (you keep 100% of gains)
- You are a permanent resident (not eligible for Help to Buy)
- You are buying in TAS (Help to Buy not available)
- You want maximum lender choice and competitive interest rates
- You plan to refinance or switch lenders in the future
When Help to Buy Is Usually Better
- You have very limited savings (only 2% deposit needed vs 5%)
- Your income is under $100,000 single / $160,000 couple
- You want the lowest possible monthly repayments
- You are buying in a lower-growth area where shared capital gains matter less
- You are comfortable with CBA or Bank Australia as your lender
- You are an Australian citizen (permanent residents not eligible)
A Worked Example
Consider a $700,000 existing home in Sydney for a single buyer earning $85,000:
With FHBG
- Deposit: $35,000 (5%)
- Mortgage: $665,000 (95%)
- LMI saved: ~$9,750
- You own: 100%
- Monthly repayment: ~$4,200 (6.5% rate, 30yr)
With Help to Buy
- Deposit: $14,000 (2%)
- Gov contribution: $210,000 (30%)
- Mortgage: $476,000 (68%)
- You own: 70%
- Monthly repayment: ~$3,008 (6.5% rate, 30yr)
In this example, Help to Buy saves ~$1,192/month in repayments and requires $21,000 less upfront. However, if the property grows 5% per year for 10 years to $1,140,000, the government would receive ~$342,000 (30% of the sale price), reducing your net proceeds.
What Both Schemes Stack With
Both the FHBG and Help to Buy can be combined with:
- FHSS (First Home Super Saver Scheme) — release super for your deposit
- State First Home Owner Grants (FHOG) — cash grants for new builds
- Stamp duty concessions — state-specific exemptions and reductions
However, you cannot use FHBG and Help to Buy together. Use our wizard to see the optimal combination for your specific situation.
See which schemes you qualify for
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Frequently Asked Questions
Can I use both FHBG and Help to Buy?
No. These two schemes cannot be used together. You must choose one or the other based on your circumstances.
Which scheme is more popular?
The FHBG is significantly more popular due to broader eligibility (no income cap, more lenders, all states). Help to Buy is newer and has more restrictions but offers larger assistance for lower-income buyers.
Can I switch from Help to Buy to FHBG later?
Not after purchase. You would need to buy back the government's equity share first, then refinance. You cannot retroactively switch schemes.
What if I am eligible for both?
Consider your income level, savings, expected capital growth, and how long you plan to hold the property. Higher earners who expect strong growth generally prefer FHBG. Lower earners who need the lowest possible repayments may prefer Help to Buy.
Sources: Housing Australia (FHBG) | Housing Australia (Help to Buy)
Disclaimer: This information is general in nature and does not constitute financial, legal, or tax advice. Calculations are estimates only and may not reflect your exact circumstances. Eligibility criteria and dollar amounts may change without notice. Always verify with the relevant government authority, your mortgage broker, or a licensed financial adviser before making decisions.