Three doors. One deposit. Rules that moved three times in nine months: the Australian Government 5% Deposit Scheme (formerly the First Home Guarantee) dropped its income caps and place limits on 1 October 2025, Help to Buy opened on 5 December 2025, and Help to Buy's income caps rose again on 1 July 2026. No wonder first home buyers freeze at the threshold.
In the first home guarantee vs FHSS vs Help to Buy contest, which door wins? The short answer: most buyers walk through the 5% Deposit Scheme, Help to Buy wins if you earn under $103,000 single or $165,000 as a couple, and the FHSS isn't a competing door at all. It's the corridor that builds your deposit on the way to either one, and it stacks with both.
Timing matters more than usual. The RBA cash rate sits at 4.35% after hikes in February, March and May 2026, with the next decision due on 11 August 2026, and rising rates thin out your competition. Auction clearance rates are running in the low 40s, and Sydney values slipped 3.2% over the June quarter (Cotality Home Value Index, June 2026). Fewer bidders at the open home means more negotiating room for a buyer who arrives prepared, which makes right now a genuine preparation window rather than a reason to sit out.
First Home Guarantee vs FHSS vs Help to Buy: the 30-second answer
Comparison first, detail after. This is the whole contest in one table.
| 5% Deposit Scheme | Help to Buy | FHSS | |
|---|---|---|---|
| What it does | Government guarantees part of your loan, so a 5% deposit buys with no LMI | Government co-buys your home, contributing an equity share you repay later | Lets you build your deposit inside super at a lower tax rate |
| Minimum deposit | 5% (a 2% pathway persists for eligible single parents) | 2% | Not a purchase scheme; it boosts whatever deposit you're saving |
| Income caps | None since 1 October 2025 | $103,000 single / $165,000 joint from 1 July 2026 | None (contribution caps instead: $15,000 per year, $50,000 lifetime) |
| Price caps | NSW $1.5M, VIC $950K, QLD $1M, WA $850K, SA $900K, ACT $1M | State caps apply and are generally tighter; check the current cap for your state before shortlisting | None |
| Lender choice | Wide panel through Housing Australia | CBA, Bank Australia and, from late July 2026, the Teachers Mutual Bank group | Any lender |
| Stacks with the others? | Yes, with the FHSS | Yes, with the FHSS | Yes, with either |
Three quick picks. Earning above the Help to Buy caps and buying under your state's price cap: take the 5% Deposit Scheme. Earning under the caps with repayments as the sticking point: Help to Buy. Still a year or more from buying: open the FHSS corridor now and choose a door later.
Why is the 5% Deposit Scheme the default door?
Because the queue is gone. From 1 October 2025, Housing Australia removed both the income caps and the annual place limits, and folded the old Regional First Home Buyer Guarantee into the main scheme at the same time. A couple on $250,000 combined now qualifies. So does a graduate on $65,000. Eligibility stopped being the hard part; the property price caps did not, so the real question became whether your target home fits under NSW's $1.5M, Queensland's $1M or Perth's $850K ceiling in a city where Cotality puts the median at $1.047 million.
The trade-off sits in the repayments. You're borrowing around 95% of the purchase price, and a new lender tests that loan at your rate plus APRA's 3% serviceability buffer, which the regulator held at its 28 May 2026 review. The scheme removes LMI, not the maths: a bigger loan still has to service at buffered rates, and that test is what quietly declines high-LVR applicants in a hiking cycle. Our 5% Deposit Scheme guide covers eligibility in full, and it's worth pressure-testing your savings target against how much deposit you need before you pick a number.
One more thing, because it changes the whole decision. Waiting for a fatter deposit feels safe. It isn't. National values rose about 8.8% over the year to May 2026 (Cotality), adding roughly $75,000 to the median home while a disciplined saver banked $30,000. The market out-saved you by more than double.
When does Help to Buy beat everything else?
Help to Buy is the newest door, opened on 5 December 2025, and it works on a different principle: the Commonwealth takes an equity stake in your home, up to 30% on an established property and up to 40% on a new build, and you buy that share back over time. Your loan shrinks. So do your repayments.
From 1 July 2026 the income caps lifted to $103,000 for singles and $165,000 for couples, and another 10,000 places opened. A smaller loan means a smaller serviceability test, which means a buyer who'd fail a 95% assessment at today's buffered rates can pass comfortably at 60-70% borrowings, which in turn means Help to Buy is often the only door that opens for a single-income buyer in a 4.35% cash-rate year. If that's you, move before the year's allocation thins out.
Two catches. Lender choice is thin: the panel is CBA, Bank Australia and, from late July 2026, the Teachers Mutual Bank group, so you're comparing a few menus rather than the market. And the government's share is real equity; if your home grows, its slice grows with it, and you buy back at the future price. Our Help to Buy explainer runs the buy-back maths in detail.
Is the FHSS worth the paperwork?
The First Home Super Saver Scheme is the door most buyers forget, mostly because it isn't a door. It's the corridor. You salary sacrifice up to $15,000 a year (to a $50,000 lifetime cap) into super, where it's taxed at 15% instead of your marginal rate, then release it for your deposit when you're ready to buy.
The tax gap is the whole point. For a teacher on $88,000, sacrificing $15,000 a year for two years puts roughly $25,500 into super, versus about $20,400 if the same pay had landed in a savings account after tax. Even allowing for withdrawal tax, that's several thousand dollars of extra deposit from identical pay packets. Same sweat, bigger deposit.
One thing we've watched trip buyers up: the release isn't instant. The ATO determination and payout can take weeks, and we've seen a signed contract wobble because the release request went in after the offer instead of before pre-approval. Lodge early, settle calmly. The FHSS guide walks through the timing and the forms.
What does stacking look like in dollars?
Meet Tegan, a 29-year-old primary school teacher in Logan, south of Brisbane, earning $88,000 and eyeing a $650,000 townhouse. Queensland's 5% Deposit Scheme cap is $1M and her income clears the Help to Buy threshold, so both doors are open. The FHSS corridor feeds either path.
Path A: FHSS + 5% Deposit Scheme. Two years of salary sacrifice turn $30,000 of gross pay into roughly $25,000 of released deposit, several thousand ahead of a bank account. She buys with $32,500 down, borrows $617,500 with no LMI, and owns 100% of the home from day one.
Path B: FHSS + Help to Buy. Same corridor, but the Commonwealth contributes 30%, or $195,000. Tegan borrows about $442,000, and her repayments drop by hundreds of dollars a month compared with Path A. The catch: the government owns a $195,000 slice she'll later buy back at the home's future value.
The gap: Brisbane values rose 17.4% in the year to June 2026 (Cotality), so the government's share in Path B would have grown by roughly $34,000 in a single year. Under Path A, that growth is entirely Tegan's; under Path B, she trades it for repayments she can breathe around today. Ownership now versus headroom now. That's the real choice, and only her serviceability numbers can settle it.
Based on typical scenarios. Individual outcomes vary.
Which door do you walk through this month?
Under the income caps and stretched on repayments: Help to Buy, before this year's places run down. Above the caps: the 5% Deposit Scheme, provided your target property fits your state's ceiling. More than a year out from buying: start the FHSS corridor now, whichever door you end up choosing.
And if none of them fit, because your price point busts the caps or you'd rather buy without scheme conditions, there's a fourth door most buyers haven't heard of. Under specialist lending policies available through Wity, any borrower can buy with a 15% deposit and no LMI; nurses, midwives, allied health and senior professionals can go to 10%; doctors and dentists to 5%.
The Wity Borrowing Power Assessment models your capacity across 45+ lenders, not one bank's calculator, and shows which of the four doors your income, deposit and postcode open. Pair it with our First Home Buyer Guide 2026 and you have the full map.
Not sure which door is yours? Book a 15-minute call with a Wity first home buyer specialist → and we'll model your options before the RBA's 11 August 2026 decision moves the maths again.