11 Jul 2025 Government Home Loans: 2025 Guide for Melbourne First-Home Buyers

Melbourne’s property market in 2025 has seen house prices climb above $900,000 across many suburbs, leaving first-time buyers grappling with hefty deposits and intense competition. With interest rates higher and a tight housing supply, stepping onto the property ladder feels more challenging than ever. 

That’s where government home loans come in, offering deposit guarantees that let you avoid significant upfront costs and hefty mortgage insurance. By covering part of your loan, these schemes allow you to focus your savings on the home itself rather than extra fees. 

In this guide, we’ll break down each government program, explain who qualifies, and share practical tips to support your journey into homeownership.

Just starting out? EverLend’s Melbourne mortgage brokers specialise in guiding first-time buyers through every government home loan step, so you feel confident from eligibility check to settlement. Call us for a free chat at 03 7036 3356 or visit www.everlend.com.au to learn more.

First Home Guarantee

The First Home Guarantee, part of the Australian Government’s Home Guarantee Scheme, lets eligible first-home buyers get a home loan with a 5% deposit and no LMI. Housing Australia guarantees up to 15% of a property’s value, enabling borrowers to access a 95% loan-to-value ratio without the extra LMI cost. 

Buyers remain responsible for stamp duty, legal fees, and ongoing repayments. Properties must be owner-occupied and within the Melbourne metro price cap of $800,000 to qualify.

Eligibility requirements:

• Australian citizen or permanent resident, aged 18 or over.

• Taxable income ≤ $125,000 (individual) or ≤ $200,000 (joint) in the previous financial year (ATO Notice of Assessment).

• Minimum deposit of 5 % of the property value.

• Must be a first-home buyer (or not have owned property in Australia in the past 10 years).

• Owner-occupier only (no investment properties).

• Property purchase price and valuation must not exceed the $800,000 Melbourne metropolitan cap.

Family Home Guarantee

The Family Home Guarantee supports eligible single parents and legal guardians with at least one dependent to enter or re-enter the housing market with a deposit as low as 2 %. The scheme provides an 18% government guarantee, allowing up to 98% LVR without LMI.

Borrowers must take a principal-and-interest loan (up to 30 years), cover all standard costs, and purchase an owner-occupied property within the $800,000 Melbourne metro value cap.

Eligibility requirements:

• Australian citizen or permanent resident, aged 18 or over.

• Must be a single parent or single legal guardian of at least one dependent (not married or in a de facto relationship).

• Taxable income ≤ $125,000 in the previous financial year (child support not included).

• Minimum deposit of 2 % (and deposit must be less than 20 % to qualify).

• Sole borrower and sole name on title.

• Must intend to be owner-occupier and hold no other property interest at the time of the loan agreement.

• Property purchase price and valuation must not exceed the $800,000 Melbourne metropolitan cap.

Regional First Home Buyer Guarantee

The Regional First Home Buyer Guarantee supports first-home buyers in designated regional Victoria with a 5 % deposit and no lenders’ mortgage insurance. It guarantees up to 15 % of the property’s value, allowing a 95 % loan-to-value ratio, but it is not available for purchases in metro Melbourne.

You must apply through a participating lender, who will confirm both area and price-cap eligibility before issuing the guarantee upon unconditional finance approval.

Eligibility requirements:

• Regional residency: You (or your co-applicant) have lived in the designated regional area (or an adjacent regional area) for at least 12 months before the Home Loan Date.

• Citizenship/permanent residency: Australian citizen or permanent resident at the Home Loan Date.

• First-home buyer status: Never owned property in Australia (or not in the past 10 years).

• Income caps: Taxable income ≤ $125 000 (individual) or ≤ $200 000 (joint) in the previous financial year.

• Deposit: Minimum savings of 5 % of the property value.

• Owner-occupier: Must intend to live in the property (no investment purchases). 

Feel lost in the paperwork? EverLend’s Melbourne mortgage brokers streamline the government home loan process for first-time buyers, handling documents, guarantee codes and lender liaison so you don’t have to. Reach out now on 03 7036 3356 or visit us at www.everlend.com.au.

Other Government Grants First-Time Buyers Can Benefit From

Stepping beyond low-deposit home-loan guarantees, first-time buyers in Victoria can tap into state grants that directly reduce their upfront costs. These programs aren’t loans; they’re tax-free payments or duty concessions that put cash back in your pocket on settlement.

• First Home Owner Grant (FHOG): The FHOG offers a one-off, tax-free payment of up to $10,000 toward the purchase or construction of a brand-new home in metropolitan Victoria. To qualify, you must be a first-home buyer, buy or build a new dwelling valued up to $750,000, and occupy it as your principal residence for at least 12 months after settlement.
• Stamp Duty Exemptions & Concessions: Victoria provides a full stamp-duty exemption on properties valued up to $600,000 and a sliding-scale concession for homes between $600,001 and $750,000. This relief can save tens of thousands of dollars at settlement, making it one of the most significant immediate savings for first-time purchasers.

• “Help to Buy” Guarantee: The Help to Buy Guarantee is a shared-equity scheme passed by Federal Parliament in November 2024 and set to open for applications in late 2025, pairing first-home buyers with the government to lower their entry costs. 

Eligible Victorian buyers need just a 2% deposit and no LMI, with the government contributing up to 40% equity on new builds and 30% on established homes, significantly reducing both the mortgage size and repayments. 

Victoria’s parliament enacted the enabling legislation in early 2025, unlocking 10,000 places a year (part of A$800 million for 40,000 buyers over four years) for Metro and regional applicants once the program launches.

Stay supported beyond settlement. Our Melbourne mortgage brokers keep an eye on rate reviews, refinancing opportunities and shared-equity options to ensure you’re always getting the most from government home loans. Call 03 7036 3356 or visit www.everlend.com.au to learn more. 

Tips on How to Get Approved for Government Home Loans

Securing a government home loan is all about preparation and knowing where to focus your efforts. With the right approach, first-time homebuyers can turn their dream of homeownership into reality.

1. Verify Eligibility Early: First-time home buyers should review all criteria set by the Victorian Government, including residency, income caps, and property value limits, to ensure they qualify before starting property searches.

2. Save and Document Your Deposit: Lenders will want proof of genuine savings for your minimum deposit, so track your bank statements and gift letters to strengthen your buying a home application and underline your commitment to home ownership.

3. Maintain a Healthy Credit Profile: Pay down debts and avoid new credit facilities to boost your credit score, demonstrating you can manage repayments responsibly and lowering the risk for lenders.

4. Explore Shared Equity Options: Investigate how a shared equity scheme works, as both the First Home Guarantee and Family Home Guarantee rely on shared equity contributions that can significantly reduce upfront costs and loan sizes.

5. Consider Off-the-Plan Property Purchases: Buying an off-the-plan property can qualify for certain government grants and may have lower initial costs, but be mindful of build timelines and contract terms before committing.

6. Work with a Mortgage Broker: A specialist broker can match you with lenders participating in government programs, navigate application complexities, and help you secure the best possible loan structure for your circumstances.

Your first home is closer than you think. EverLend’s Melbourne mortgage brokers equip first-time buyers with a tailored action plan, comparing loan offers, streamlining the application, and fast-tracking approval. Call us at 03 7036 3356 or visit us at www.everlend.com.au/ to schedule a free chat.

Frequently Asked Questions (FAQs)

What is the Victorian Government scheme for home loans?

The main state scheme is the First Home Owner Grant (FHOG), a one-off $10,000 payment for eligible first-home buyers of new or substantially renovated homes valued up to $750,000 in Victoria.

What is the 5 % home loan deposit scheme in Victoria?

That’s the federal First Home Guarantee, which lets you secure a home loan with just a 5 % deposit by guaranteeing up to 15 % of the property’s value and waiving Lenders Mortgage Insurance.

How much deposit do I need for a house in Melbourne?

Typically, you’d need 20 % to avoid LMI, but under government home loans, you can deposit as little as 5 % (or 2 % via the Family Home Guarantee) and skip those extra insurance costs.

What are the available types of home loans for first-time homebuyers in Melbourne?

First-timers can tap four NHFIC guarantee schemes, or choose standard fixed-rate, variable-rate, interest-only or split-rate loans through participating lenders.

How can mortgage brokers help first-time buyers with government home loans?

Melbourne mortgage brokers assess your eligibility, reserve your guarantee spot, gather required documents, compare loan offers (fixed, variable or split), liaise with lenders on your behalf and guide you seamlessly from application through to settlement.

Conclusion

Government home loans are designed to help first-time homebuyers who want to settle down in Melbourne – or anywhere else in Victoria – easily transition into homeownership. 

Start your journey today by checking your eligibility and speaking to a trusted Melbourne mortgage broker. 

At EverLend, we’re based in St Kilda, serving greater Melbourne, and our team is ready to guide you through each government loan option. Reach out today for a free consultation. Whether you need help understanding deposit guarantees or choosing the perfect loan structure, we’ll explain everything in plain English. 

Call us at 03 7036 3356 or visit www.everlend.com.au to get started!