Key takeaways
- You only need a 2% deposit to buy a home if you’re a single parent because Australia’s Family Home Guarantee is here to help you get in the door without waiting decades.
- The government steps in to back up to 18% of your loan so you don’t have to pay that huge lenders mortgage insurance, which can save you tens of thousands.
- You still have to prove you can afford the loan, and spots fill up fast each year, so it’s smart to jump on it early if you’re serious.
For single parents, the dream of owning a home can feel just out of reach.
Between juggling rent, bills, school expenses, and day-to-day life, saving up a 20% deposit can take years. Sometimes, even takes for decades.
But here’s the good news… the Australian Government has created a pathway to help.
It’s called the Family Home Guarantee. It allows eligible single parents to buy a home with as little as 2% deposit and without paying lenders mortgage insurance (LMI).
If you’re raising a child on your own and thinking home ownership is too far out of reach, this is something you’ll want to know about.
What is a Family Home Guarantee and how does the 2% deposit scheme work?
The Family Home Guarantee is a federal initiative aimed specifically at single parents with at least one dependent child.
Under the scheme, you can purchase a home with a minimum 2% deposit, and the government acts as a guarantor for up to 18% of the loan.
That way, you don’t need the full 20% deposit that most lenders require to avoid LMI.
Through this, you can save you tens of thousands of dollars upfront.
What’s even better about this is you don’t need to be a first home buyer.
The scheme is open to those who may have owned a property before but don’t currently own one.
Who’s eligible for the Family Home Guarantee’s 2% deposit scheme?
To qualify, you’ll need to meet a few rules set by the scheme.
Here are the key eligibility criteria:
- You must be a single parent. You can be separated, divorced, widowed or never partnered. The key is you’re not living with a partner.
- Have at least one dependent child under your care.
- Be an Australian citizen. Permanent residents are not eligible currently.
- Earn $125,000 or less per year. This does not include child support.
- You do not currently own a property.
If that’s you, you could be eligible for this leg-up into the housing market.
How does the 2% deposit scheme actually helps?
Let’s break it down with a quick example.
Say you’re looking at a $550,000 home.
A typical 20% deposit would be $110,000, which is out of reach for many single-income households.
But under the Family Home Guarantee, you’d only need $11,000 saved (2%), and the government backs the rest.
You avoid mortgage insurance, get access to the property market sooner, and start building equity rather than continuing to rent.
Can you buy anywhere?
The scheme has price caps depending on your location.
Here’s a rough guide to help you get started.
Just keep in mind things can change, so always check the latest rules.
- $700,000 in capital cities and major regional centres (e.g. Newcastle, Geelong, Gold Coast)
- $450,000–$600,000 in regional and rural areas, depending on the state or territory.
It covers both newly built and existing homes, and there’s no requirement to build.
That’s a huge bonus for those who need to settle quickly for schooling or stability.
* The capital city price thresholds apply to regional centres with a population over 250,000 (Newcastle & Lake Macquarie, Illawarra (Wollongong), Geelong, Gold Coast and Sunshine Coast), recognising that dwellings in regional centres can be significantly more expensive than other regional areas.
Search the property price threshold for a suburb or postcode at www.housingaustralia.gov.au
What’s the catch?
There isn’t really a catch, but there are a few things to keep in mind:
- You still need to qualify for a home loan through a participating lender. That means your income and expenses need to support the loan amount.
- Your credit history matters, but don’t stress if it’s not perfect. Many single parents think they won’t qualify, but it’s worth checking.
- The scheme only offers a limited number of places each financial year. Once they’re filled, you may have to wait for the next round.
How to get started with Family Home Guarantee?
The first step is to speak with a mortgage broker or lender who’s familiar with the scheme.
Many banks and credit unions are part of the program, but it helps to work with someone who understands how to position your application and walk you through it.
Better still, look for someone who specialises in helping single parents or Defence families, if that’s your background.
They’ll understand the extra layers involved in the ADF home loans, DHOAS home loans, and defence home loan refinance.
They know how to guide you through each step without the usual hassle.
Step into your own home with confidence
If you’ve been sitting on the sidelines of the housing market, feeling like you’ll never get in as a single parent, don’t rule yourself out.
The Family Home Guarantee is changing the game, offering a real, tangible chance to break out of the rent cycle and into something that’s your own.
A home gives you and your kids more than just a roof over your head.
It gives you stability, security and a long-term investment in your future.
And with just a 2% deposit, that future might be closer than you think.
