Federal housing policy in 2026: Help to Buy, Home Guarantee, and the schemes that actually pay out

Two federal schemes do almost all of the work for first-home buyers in 2026: Help to Buy and the Home Guarantee Scheme. Everything else on the Commonwealth menu is either targeted at builders, lenders, or community housing providers, not the household at the auction. The schemes that pay a real buyer real money are these two, and they work very differently.

Help to Buy is shared equity. The federal government takes a stake in the property and you contribute a smaller deposit and a smaller mortgage. The Home Guarantee Scheme is a deposit guarantee. The government underwrites the loan so a lender will accept a 5% (or 2%) deposit without charging Lender's Mortgage Insurance. One cuts the price of buying. The other cuts the cost of borrowing.

Help to Buy: shared equity, low deposit, capital-gain share

Help to Buy launched nationally after the enabling legislation cleared the Senate in late 2024. The mechanics are blunt. The federal government takes up to 30% equity in an existing home or up to 40% equity in a new build. The buyer fronts a 2% deposit and finances the remainder with a standard mortgage, with no LMI because the government equity sits in the deposit gap.

The eligibility filter is tight. Income caps run around $90,000 for a single applicant and $120,000 for couples. Property price caps are city-tiered and broadly track the median for each capital, with regional caps lower again. The scheme is capped at 10,000 places per financial year initially, with the first tranche typically clearing inside the first quarter of release.

The catch is the back end. When you sell, the government takes its equity share of the sale price, which means it shares in the capital gain. If the property doubles, the government's 30% stake doubles with it. Help to Buy works for buyers who would otherwise be priced out, where a smaller share of a real asset beats a full share of nothing. It works less well for buyers who could service a normal loan and would rather keep all the upside.

Home Guarantee Scheme: three tiers in 2026

The Home Guarantee Scheme (formerly the First Home Loan Deposit Scheme) sits at Housing Australia and now runs three tiers, all of which save the buyer LMI by underwriting the lender against a smaller-than-usual deposit.

• First Home Guarantee. 5% deposit, no LMI. Around 35,000 places per financial year. Income caps near $125,000 for singles and $200,000 for couples. Price caps tiered by city and region.
• Family Home Guarantee. 2% deposit for single parents and single legal guardians. Around 5,000 places. The income cap matches the FHBG single-applicant figure.
• Regional First Home Buyer Guarantee. 5% deposit, no LMI, restricted to non-metro buyers who have lived in the region for the qualifying period. Around 10,000 places.

Places reset every 1 July and historically the metro FHBG allocation runs out within the first few months of the financial year. The scheme is administered by participating lenders, and the lender list is the gatekeeper: a buyer who pre-approves with a non-participating bank cannot retrofit a guarantee onto an existing application.

Stacking with state grants and stamp-duty concessions

Federal and state schemes operate independently and stack neatly on the same purchase. A Queensland first-home buyer of a new build at $700,000 can claim:

• Home Guarantee Scheme: 5% deposit, no LMI (around $18,000 saved).
• Queensland First Home Owner Grant: $30,000 cash.
• Queensland first-home stamp-duty exemption (around $17,000 saved at $700k on a new build).

Combined federal-and-state benefit on that contract lands near $65,000 of cash and avoided cost. The state-by-state grant detail is walked through in the First Home Owner Grant by state article. Help to Buy and FHBG are mutually exclusive on the same contract, because both rely on the same below-20% deposit treatment, but either one stacks with state grants and duty concessions.

Worked example: $700k Brisbane new build, FHB couple on $150k

Two paths, same contract, very different cash position at settlement and at sale.

Path A: Help to Buy, 30% government equity. The couple is just over the Help to Buy income cap on the published $90k/$120k figures, so this path is illustrative if the cap is lifted or the household sits below it. Government equity of $210,000, buyer deposit of $14,000 (2%), buyer mortgage of $476,000. Stamp duty exempt under the QLD first-home concession on a new build at this price. The $30,000 FHOG still applies because it is a state cash grant attached to the new-build contract, not the deposit structure. Monthly principal-and- interest at around 6.25% on a 30-year term is near $2,930.

Path B: Home Guarantee Scheme, 5% deposit. The couple sits well under the FHBG combined cap of $200,000. Buyer deposit of $35,000, buyer mortgage of $665,000, no LMI saving roughly $18,000 against the 95% LVR alternative. Stamp duty exempt and $30,000 FHOG identical to Path A. Monthly principal-and-interest at the same rate is near $4,095.

The repayment gap between the two paths is around $1,165 per month, or roughly $14,000 a year. Across a 10-year hold that is $140,000 of cash flow that Path A keeps in the household account. The other side of the ledger is the capital-gain share. If the property grows from $700,000 to $1,000,000 over the hold, the gross gain is $300,000. Help to Buy returns 30% of that gain, or $90,000, to the federal government at sale. Path A nets $210,000 of capital gain plus the $140,000 of saved cash flow against Path B's $300,000 of capital gain at higher repayments.

At a 10-year horizon and that growth assumption the two paths roughly break even on total wealth, with Path A producing better cash flow and Path B producing a larger lump at sale. Higher growth tilts the answer towards Path B. Lower growth or a longer expected hold at high repayments tilts towards Path A. Run the numbers on your own contract through the mortgage calculator and the borrowing power estimator before deciding which lever fits.

Caveats: caps fill, eligibility windows, budget drift

Three practical traps catch buyers between the press release and the contract.

• Places fill quickly. The metro FHBG allocation has historically exhausted within the first quarter or two of each financial year. Help to Buy places at 10,000 per year are tighter again. A pre-approval that depends on a guarantee place is conditional on a place still being available when the lender lodges, which is not the same as having one reserved.
• Eligibility windows are strict. Income tests look at the prior financial year on your notice of assessment. Citizenship and residency tests apply at contract date. Owning a prior investment property disqualifies most applicants from both schemes, with limited carve-outs.
• Budget changes drift the figures. Income caps, place numbers and price caps are reset by federal budget announcement and Housing Australia administrative settings. The figures in this article are 2026 baselines; the figure on the day you lodge is the figure that pays out.

Is it actually worth it

The Home Guarantee Scheme is close to a no-brainer if you qualify. The LMI saving alone is $15,000 to $25,000 on a typical first-home purchase, paid as cash you do not have to find at settlement. There is no back-end cost and no equity share. The only friction is the participating-lender list and the first-in-best-dressed nature of the place allocation.

Help to Buy is more nuanced. It works if you would otherwise be priced out entirely, or if your serviceability is the binding constraint and the lower mortgage tips the bank from no to yes. It works less well if you can already service the loan you need, because a 30% equity share is a very large slice of your future wealth in exchange for a one-time deposit reduction. Numerate buyers should run both paths on their actual contract before committing, and not assume the scheme with the lower deposit is automatically the better deal.

Both schemes pair with state benefits, both have annual caps, and both reset each 1 July. The cost-of-purchase walkthrough in the first-home buyer guide covers the line items the federal schemes do not touch. Burbfinder carries verified-on dates on every concession and cap referenced, because federal housing settings change more often than the headlines admit.