Family Home Guarantee 2026 — Single Parents Buy with $12,000 Deposit (No LMI, No Income Cap)

Buying a home as a single parent is a different kind of hard. You are running a household on one income, covering childcare or after-school care, keeping the lights on, and somehow saving a deposit on top of all of it. When the "standard" 20% deposit on a $650,000 home is $130,000, the maths stops feeling like a stretch and starts feeling like a closed door.

Here is the part most people miss: you almost certainly do not need 20%, or even 10%. There is a federal scheme, expanded heavily in October 2025, that lets eligible single parents and guardians buy with as little as a 2% deposit and no Lenders Mortgage Insurance. It is called the Family Home Guarantee, and it was built specifically for single-parent families.

One thing worth getting straight up front, because it trips people up in 2026: the scheme was folded into the renamed Australian Government 5% Deposit Scheme, and the Family Home Guarantee is now its single-parent 2% stream. Lenders, brokers and buyers still call it the Family Home Guarantee, so we will too. The old housingaustralia.gov.au page now redirects to firsthomebuyers.gov.au, which is the official home for current rules.

Since the October 2025 expansion there are unlimited places (previously capped at 5,000 a year), no income cap (previously $125,000), and much higher property price caps in every state. In the first four months after the changes, 22,921 guarantees were issued nationally — a 75% jump on the same period a year earlier. This guide covers who qualifies, the corrected 2026 price caps, what a single parent can actually save, how the scheme stacks with state grants, how it compares to Help to Buy, and how to apply.

What is the Family Home Guarantee?

The Family Home Guarantee is a federal scheme that helps single parents and single legal guardians buy a home with a deposit as small as 2% of the property value. It now sits inside the Australian Government 5% Deposit Scheme as the single-parent stream, administered through Housing Australia.

Normally, if you buy with less than a 20% deposit, your lender makes you pay Lenders Mortgage Insurance (LMI) — a one-off premium that can run $15,000 to $35,000 or more depending on the loan (see what LMI would cost in your scenario). Under the Family Home Guarantee, the federal government guarantees up to 18% of the property value. Your 2% plus the government's 18% reaches the 20% mark lenders need to waive LMI. You are not buying a cheaper home. You are skipping the LMI bill, and the years of saving that usually come before it.

A few things worth being clear on:

• It is not a cash grant. The government does not hand you money — it acts as a guarantor to your lender.
• You do not owe the government anything. There is no repayment, no clawback, no equity share. It is not a loan from them.
• You do not need to be a first home buyer. If you owned a home before — say, before a separation — but do not currently own property, you can still qualify. That one feature makes the FHG unusually accessible.
• New or existing homes both count — houses, units, townhouses and house-and-land packages.

The scheme was introduced in the 2021–22 Federal Budget and expanded heavily from 1 October 2025. For the current rules and the official property-price-cap tool, the authoritative source is firsthomebuyers.gov.au.

Single parent home loans in Australia 2026

If you are a single mum or dad hunting for a home loan with a small deposit, the Family Home Guarantee is the standout — but it is not the only path. There is also the dedicated single parent home loan scheme route through participating lenders, the standard low deposit home loan with LMI, and in WA the Keystart option. Here is how they compare for a single parent buying a $650,000 home in Perth.

For most single parents the FHG wins on every line that matters: the lowest deposit, no LMI, and a competitive bank rate from day one. Its main edge over Keystart is that interest rate — the FHG gives you a standard bank rate, while Keystart usually charges a premium (though Keystart can be more forgiving if your credit history is messy). And that "single parent home loan scheme" you may have seen advertised by lenders? In practice it is this same Family Home Guarantee stream, applied to single-parent applicants.

None of this means a single income is no obstacle. It is. What it means is that the deposit stops being the thing that takes three to four years to fix. Want to see how the borrowing side stacks up? Our borrowing power calculator shows what one income can support, and pairing the FHG with the First Home Super Saver Scheme can get even the 2% together faster.

Can you actually afford it on one income?

This is the part the bank brochures skip, and it deserves its own section. Getting into a home with 2% is one thing. Servicing the repayments on a single income — with childcare, groceries and a kid who keeps outgrowing their shoes — is the real test, and it is the test lenders apply too. A bigger loan means a bigger repayment, and the FHG does nothing to change that.

Here is where it gets genuinely under-served, and where a good broker earns their keep. Lenders treat single-parent income differently from one another. Some participating lenders will count the parenting payment, Family Tax Benefit and child support toward your serviceability; others count some of it, or none of it. There is no single rule. Two lenders can look at the same income and land on very different borrowing limits, purely because of how each one treats government payments and maintenance.

That is not a reason to give up. It is a reason to get someone in your corner who knows which lenders are flexible. A mortgage broker who has done single-parent applications before can tell you, before you fall in love with a house, which lenders will count your full picture. Run your numbers through our mortgage repayment calculator and borrowing power calculator first, so you walk into that conversation knowing what a comfortable repayment looks like for your household — not just the maximum a lender will hand you.

Family Home Guarantee eligibility 2026

The criteria were relaxed in October 2025. To qualify, you need to meet all of the following.

You are a single parent or legal guardian

You must be a single parent or single legal guardian of at least one dependent child. "Single" means you are not married or in a de facto relationship at the time you apply. The child has to be under 18 (or under 23 if they are a full-time student) and live with you at least 35% of the time, so shared-custody arrangements are fine. You do not need full custody.

You are an Australian citizen or permanent resident, aged 18+

Both citizens and permanent residents qualify, as long as you are at least 18.

There is no income cap

Since 1 October 2025, there are no income caps on the Family Home Guarantee. The old $125,000 taxable-income limit is gone entirely — single parents at any income level can now use the scheme. This was one of the biggest changes in the expansion, and it quietly opened the door for a lot of working parents who earned a little too much before.

You do not currently own property

You must not currently own any property — residential, commercial or investment — at settlement. But you do not need to be a first home buyer. If you owned a home, sold it after a separation, and do not own anything now, you are still eligible. That is the distinction that makes the FHG reachable for so many single parents other schemes shut out.

The loan itself

• You must be the sole applicant on the loan and the title (no co-borrowers).
• Minimum 2% deposit, and less than 20%.
• Principal-and-interest repayments, up to a 30-year term.
• Through a participating lender (most major banks and many smaller ones).
• Owner-occupier only — it has to be your home, not an investment.

A mortgage broker can confirm your eligibility in a single call and tell you which participating lenders are turning FHG applications around fastest. Not sure where you sit? Our eligibility checker runs through the schemes you qualify for in a couple of minutes.

Family Home Guarantee price caps 2026 — state by state

The property price caps were lifted from 1 October 2025, and a couple of jurisdictions have moved again since. These are the current caps (verified against firsthomebuyers.gov.au):

These caps are now generous enough to cover most of the market in most capitals. Perth's $850,000 cap reaches nearly every suburb — established homes in Baldivis, Joondalup, Rockingham and Armadale, plus house-and-land packages out in the growth corridors. Brisbane's $1,000,000 cap opens up suburbs that were off the table a year ago, and Sydney's $1,500,000 cap is the highest in the country. The one to flag: in the NT, Darwin's cap rises to $750,000 from 1 July 2026 while the rest of the Territory stays at $600,000.

Caps get reviewed periodically and a few are mid-change, so always confirm the current figure for your suburb at firsthomebuyers.gov.au or with your lender before you make an offer. If you also want to know what grants apply where you are buying, our grants hub breaks it down by state, including WA, and the stamp duty calculator shows the fees side.

What changed in October 2025 — the major expansion

The expansion from 1 October 2025 turned the FHG from a small, capped program into one of the more generous buyer-assistance schemes going. Here is the before-and-after.

The effect was immediate: 22,921 guarantees in the first four months, a 75% increase on the year before. Removing the income cap and the cap on places did the heavy lifting, bringing in a much wider group of single parents who simply did not fit the old rules.

How much can a single parent save with the FHG?

Let us run a real example for a single parent buying in Perth.

Scenario: a $650,000 home in Perth

That is roughly $39,500 less to find upfront. On one income, $39,500 is not a rounding error. It is the gap between buying this year and watching prices climb while you keep saving.

Measured against a full 20% deposit ($130,000), the FHG saves you $117,000 upfront plus the LMI. The trade-off is honest: a bigger loan means higher monthly repayments, and that has to be comfortable on your income (see the affordability section above). But for most single parents, being able to stop paying off someone else's mortgage in rent — and start building their own equity — is worth more than holding out for a deposit that may never catch up to the market. Plug your numbers into the borrowing power calculator to see exactly what a single income supports with a 2% deposit.

Family Home Guarantee vs First Home Guarantee

These two get muddled constantly, because the names rhyme and both now sit inside the same parent scheme. They target different buyers.

The short version: if you are a single parent, the Family Home Guarantee beats the First Home Guarantee every time — a smaller deposit (2% vs 5%), a bigger guarantee (18% vs 15%), and no first-home-buyer requirement. If you qualify for both, take the FHG.

Family Home Guarantee vs Help to Buy — which suits you?

In 2026 single parents have two federal schemes to weigh up, and the right one comes down to a single question: would you rather own 100% of a smaller home, or share ownership of a larger one? The Help to Buy scheme launched on 5 December 2025 and works on a completely different model. Most articles still ignore it. Here is the plain-English comparison — and it now applies almost everywhere, because Help to Buy reached the last holdouts in 2026.

The fundamental difference

Under the Family Home Guarantee, you own 100% of the home from day one. The government's only role is guaranteeing part of your loan so you skip LMI. No equity claim, no clawback.

Under Help to Buy, the government becomes your co-owner. It puts in up to 40% of the price for a new build (or 30% for an existing home) in exchange for that same share of equity. You only borrow against your portion. When you sell, you repay the government's share of the sale price — so if the home doubles in value, what you owe back roughly doubles too.

Side by side: FHG vs Help to Buy (2026)

One note on the income cap that confuses a lot of single parents: Help to Buy sets the single applicant cap at $100,000, but single parents are assessed on the family income cap of $160,000 — the same figure couples get. So a working single parent earning, say, $120,000 is fine for Help to Buy, even though that is above the singles cap.

Worked example: a $650,000 home, single parent

Under the FHG: a 2% deposit of $13,000, and you borrow $637,000. At 6.4% over 30 years (rate indicative for June 2026), repayments are roughly $3,985 a month. You own 100%. If the home grows to $850,000 over five years, every dollar of that $200,000 gain is yours.

Under Help to Buy (existing home): the same $13,000 deposit, but the government chips in 30% ($195,000), so you borrow only $442,000. Repayments at 6.4% over 30 years drop to roughly $2,765 — about $1,220 a month less. The catch comes at sale: if the home reaches $850,000, you owe the government 30% of $850,000 = $255,000, not the $195,000 they put in. Your slice of the $200,000 gain is $140,000; theirs is $60,000.

Which one is right for you?

Lean towards the Family Home Guarantee if:

• You can comfortably service the full loan and want to keep all the future capital growth.
• You earn over $160,000, which puts Help to Buy out of reach.
• You are not a first home buyer — for instance, you sold a property after a separation. Help to Buy needs you to be a first home buyer (or to have owned nothing in 10 years); the FHG does not.
• You want the freedom to sell, renovate or borrow against your equity later, without a co-owner in the picture.

Consider Help to Buy if:

• Your borrowing capacity on one income is the binding constraint, and the smaller loan unlocks a home you otherwise could not reach.
• Lower monthly repayments matter more to your cash flow than maximising long-term gain.
• You qualify for both and the property sits under both price caps.
• You can move quickly — the 10,000-place annual cap fills fast.

A mortgage broker can model both schemes against your real income, deposit and target suburb in one sitting. We have a full Help to Buy vs guarantee comparison if you want to go deeper before you decide.

How to apply for the Family Home Guarantee

You do not apply to Housing Australia directly. The guarantee is accessed through a participating lender as part of your home loan application. Here is the process, step by step.

Step 1: Check your eligibility

Use the eligibility tool at firsthomebuyers.gov.au, or speak to a mortgage broker who knows the guarantee programs. A broker can assess you in a single phone call and tell you which lenders are on the panel — and, just as importantly for single parents, which ones count your full income.

Step 2: Get pre-approved with a participating lender

You need a loan from a lender that participates in the FHG. Your broker will know who is processing applications fastest. Our pre-approval guide walks through what you will need and how long it takes.

Step 3: Your lender reserves a guarantee place

Your lender applies to Housing Australia on your behalf, as part of the loan application. There is no separate form for you to fill out — the lender verifies your eligibility and submits the request.

Step 4: Find a property within the price cap

With your guarantee confirmed and pre-approval in hand, look for a home within your state's cap. New builds, existing homes and house-and-land packages all count. If you are getting close to settlement, line up a conveyancer early so the legal side does not become the bottleneck.

Step 5: Buy with a 2% deposit and no LMI

When your offer is accepted, the guarantee activates and your loan proceeds without LMI. Your broker coordinates between the lender and Housing Australia.

With unlimited places, there is no rush to "secure a spot" — but start early anyway, so your pre-approval is ready the moment you find the right place. Not sure where you are up to in the buying journey? Our journey map shows what comes next from here.

One cost the FHG does not cover, and it catches single parents off guard: your lender still needs building insurance in place before settlement, usually $1,200–$2,500 for the first year. Compare home insurance in the weeks after your offer is accepted, so the certificate of currency is ready when your broker locks in unconditional approval. A delay here can push settlement back by days.

Stacking the FHG with other schemes

The Family Home Guarantee is federal, so it stacks with state-level help. The most useful combinations:

• FHG + First Home Owner Grant. If you are buying a new build, you can claim your state's FHOG on top of the FHG. In WA that is $10,000 for a new home; in Queensland it is $30,000 for new builds under $750,000 (until 30 June 2026). Check your state's grants here.
• FHG + stamp duty concessions. First home buyer stamp duty relief applies whether or not you use the FHG. In WA, first home buyers currently pay no transfer duty on homes up to $500,000, with a concession up to $700,000; the WA Government announced in its May 2026 Budget a proposal to lift these to $600,000 and $800,000, but that change is not yet legislated — check the current threshold before you rely on it. Use our stamp duty calculator to see what you would actually pay.
• FHG + FHSS. The First Home Super Saver Scheme lets you save your 2% deposit through super with real tax savings. FHSS speeds up the deposit; the FHG removes the LMI barrier.
• FHG + Keystart (WA). Usually the FHG wins over Keystart because you get a competitive bank rate — but if your credit history is complicated, Keystart can be more forgiving on approval.

The logic underneath: the FHG clears the deposit and LMI hurdles, and every other scheme stacks on top because each one tackles a different part of the purchase. Grants cut upfront costs, stamp duty concessions cut fees, and FHSS helps you save faster.

FHG + FHOG stacking — indicative combined value by state

The federal FHG removes LMI. Each state's FHOG adds a separate cash grant (new builds only, in most states). Combined with stamp duty relief, the total can be substantial. The figures below are indicative estimates for a roughly $600,000–$700,000 new build — your actual numbers depend on price, suburb and timing, so treat them as a rough guide, not a quote.

Queensland offers the best combined value through 30 June 2026, thanks to the boosted $30,000 FHOG, while the NT lands the highest single figure because its $50,000 HomeGrown Territory grant (which replaced the old $10,000 NT FHOG) is the largest in the country. Confirm your state's current numbers on our grants hub before you bank on any of them.

Participating lenders — where to apply for the FHG

The FHG is delivered through participating lenders, not by the government directly. Major participants for 2026 include Commonwealth Bank, NAB, ANZ, Westpac, Bank Australia, The Mutual Bank, Gateway Bank, Beyond Bank, Heritage Bank, Police Bank, P&N Bank (WA) and Great Southern Bank. Rates are not identical across them — they can vary by 0.3–0.7% on an otherwise identical FHG application, which is real money over 30 years. A broker comparing five or six participating lenders usually finds a meaningfully better rate than the first bank you would have walked into. Find a NestPath-vetted broker — free.

Frequently asked questions

Is the Family Home Guarantee still available in 2026?

Yes. It is still running and still open to single parents and legal guardians. The only change to the name is that it now sits inside the renamed Australian Government 5% Deposit Scheme as the single-parent 2% stream — but lenders and buyers still call it the Family Home Guarantee. The official information lives at firsthomebuyers.gov.au (the old housingaustralia.gov.au page now redirects there).

How much deposit does a single mum need to buy a house?

As little as 2% under the Family Home Guarantee — about $13,000 on a $650,000 home — with no Lenders Mortgage Insurance. You also do not need to be a first home buyer. The real test is then serviceability: making the repayments comfortably on one income, which is where a broker who knows single-parent-friendly lenders helps.

Does Centrelink, child support or the parenting payment count as income for a home loan?

It depends on the lender — some participating lenders count the parenting payment, Family Tax Benefit and child support toward your serviceability, and some do not. There is no single rule, so two lenders can give you very different borrowing limits on the same income. A broker who knows which lenders are flexible on government and maintenance payments can match you to the right one.

Is the Family Home Guarantee the same as a family guarantor loan?

No — they are completely different. The Family Home Guarantee is a free government guarantee with no family member involved at all. A "family guarantor loan" is a private bank product where a parent or relative puts up their own property as security for your loan. The FHG does not put anyone else's home on the line.

What is the 2% deposit scheme in Australia?

It is the single-parent stream of the Australian Government 5% Deposit Scheme — better known as the Family Home Guarantee. Single parents and legal guardians can buy with a 2% deposit; other eligible first home buyers use the 5% stream (the First Home Guarantee). Both avoid LMI by having the government guarantee part of the loan.

Can I get the First Home Owner Grant if I use the Family Home Guarantee?

Yes, in every state that offers a FHOG — the federal FHG and a state FHOG are independent and stack. The FHOG depends on your state's rules (new builds only in most states, with price caps). A single parent buying a $620,000 new build in QLD with the FHG can receive the $30,000 QLD FHOG on top of the federal LMI guarantee.

Can I use the Family Home Guarantee if I'm not a first home buyer?

Yes — this is one of the FHG's most important features, and where it differs from the 5% First Home Guarantee stream. You qualify as long as you are a single parent or guardian with at least one dependent child and do not currently own property in Australia. Past ownership (for example, a home owned before separation) does not disqualify you.

Do I have to be a first home buyer for the Family Home Guarantee?

No. You can have owned property before, as long as you do not currently own any at settlement. This makes the FHG especially valuable for single parents who sold a home after a separation and are now buying again.

Are there income limits for the Family Home Guarantee in 2026?

No. Income caps were removed from 1 October 2025. Previously single parents had to earn $125,000 or less; now there is no income limit at all. This was one of the biggest changes in the October 2025 expansion.

What are the Family Home Guarantee price caps for 2026?

Current capital-city caps are Perth $850,000, Sydney $1,500,000, Brisbane $1,000,000, Melbourne $950,000, Adelaide $900,000, Hobart $700,000, Canberra $1,000,000 (all areas), and Darwin $600,000 — rising to $750,000 from 1 July 2026. Rest-of-state caps are lower, ranging from $500,000 to $800,000. Always confirm your suburb's cap at firsthomebuyers.gov.au.

Can I combine the Family Home Guarantee with other grants?

Yes. The FHG is federal and stacks with state help including the First Home Owner Grant, stamp duty exemptions and concessions. For example, a single parent buying a new build in WA could combine the FHG (2% deposit, no LMI) with the $10,000 WA FHOG and first home buyer stamp duty relief. See our grants hub for the full breakdown.

What is the difference between the Family Home Guarantee and the First Home Guarantee?

The Family Home Guarantee needs only a 2% deposit (vs 5%), gives a larger 18% government guarantee (vs 15%), and does not require you to be a first home buyer — but it is only for single parents and legal guardians with dependent children. If you qualify for both, the FHG is the better deal.

Did the May 2026 federal budget change the Family Home Guarantee?

No — the scheme itself was unchanged in the May 2026 budget. The 2% deposit, the no-income-cap rule and the state price caps all continue as set after the October 2025 expansion. The budget's broader housing and tax measures, including any negative-gearing changes flagged for 2027, are separate and not yet legislated, so do not assume them when planning your purchase.

How long does the Family Home Guarantee application take?

It is processed as part of your home loan application — your broker or lender handles it, with no separate form. The guarantee is usually confirmed within the same window as your loan pre-approval, roughly 1 to 5 business days depending on the lender. With unlimited places, there is no risk of spots running out.

Ready to see what you can afford as a single parent? Use our borrowing power calculator, then talk to a broker who can assess your FHG eligibility and find the best rate — free, and no obligation.