The Home Guarantee Scheme (HGS), which enables buyers to enter the market with a deposit as low as 2%, has proven to be a pathway towards steady equity growth for its participants.

A joint study by the National Housing Finance and Investment Corporation (NHFIC) and CommBank revealed first-home buyers achieved an average equity gain of $82,000 since 2020.

While the average deposit size under the scheme remains relatively unchanged - from $35,200 in 2022 to $36,400 in 2023 - it is significantly lower than the broader first-home buyer market, where average deposits rose by almost 50% to $159,000.

Borrowers utilising the HGS tended to take out smaller loans relative to their income compared with the broader first-home buyer market.

The average loan amount under the HGS has increased 4.7% since 2020, while the average loan for the broader market increased by 13.4%.

NHFIC Head of Research Hugh Hartigan said first-home buyers were showing resilience in the face of challenging conditions.

“Despite the challenging interest rate environment and dwelling price falls last year, it is encouraging that the (average) equity position of Home Guarantee Scheme participants appears to be holding up,” Mr Hartigan said.

“It is also interesting that deposits for first home buyers outside of the HGS have risen so strongly, which may indicate they have other ways of supplementing their savings.”

The analysis also revealed the HGS supported more women as a proportion of single borrowers, surpassing the broader first-home buyer market (54% compared to 47%).

In June, the NHFIC reported 100,000 Australians had taken advantage of the low-deposit scheme since its commencement in 2020.

According to the NHFIC, around a fifth of all those who qualified and used the scheme were key workers including 6,700 teachers, 5,000 nurses, and almost 3,500 social workers.

In the 2023 Federal Budget, the government announced an expansion to the eligibility criteria for the HGS.

From 1 July, friends, siblings, and other family members will be able to jointly apply for the First Home Guarantee and Regional First Home Guarantee.

The Guarantees will also be available to borrowers who are permanent residents, as well as non-first home buyers who haven’t owned a property in Australia in the past 10 years.


Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.

Update resultsUpdate
LenderHome LoanInterest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees LVR Lump Sum Repayment Additional Repayments Split Loan Option TagsFeaturesLinkCompare
6.04% p.a.
6.06% p.a.
Principal & Interest
Featured Online ExclusiveUp To $4K Cashback
  • Immediate cashback upon settlement
  • $2,000 for loans up to $700,000
  • $4,000 for loans over $700,000
5.99% p.a.
5.90% p.a.
Principal & Interest
Featured Apply In Minutes
  • No application or ongoing fees. Annual rate discount
  • Unlimited redraws & additional repayments. LVR <80%
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
6.14% p.a.
6.16% p.a.
Principal & Interest
Featured Unlimited Redraws
  • No annual fees - None!
  • Get fast pre-approval
  • Unlimited additional repayments free of charge
  • Redraw freely - Access your additional payments when you need them
  • Home loan specialists available today
Important Information and Comparison Rate Warning

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of . View disclaimer.

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