A single parent can buy a home with a 2% deposit. It is the least known part of the federal deposit scheme and the most generous.
This used to be called the Family Home Guarantee. It is now the single parents stream of the Australian Government 5% Deposit Scheme, and the rules were loosened on 1 October 2025.
How it works
You contribute 2% of the purchase price. The lender funds up to 98%. The government guarantees the gap, so there is no lenders mortgage insurance to pay.
On a $700,000 home that is a $14,000 deposit rather than $140,000, and no LMI premium on top. It is the difference between buying this year and saving for another decade.
What changed in October 2025
- No income test. The old $125,000 limit is gone.
- No cap on places. There is no annual allocation to miss out on.
- Higher price limits, matching the main scheme: $1.5 million in Sydney, $1 million in Brisbane and Canberra, $950,000 in Melbourne, $900,000 in Adelaide, $850,000 in Perth, $750,000 in Darwin, $700,000 in Hobart.
Who qualifies
You need to be a single parent or legal guardian with at least one dependent child, an Australian citizen or permanent resident, and buying a home to live in.
The part that surprises people: you do not have to be a first home buyer. Having owned a home before does not rule you out. What matters is that you hold no other property interest once the new home settles, which is why this works for people who lost the family home in a separation.
What borrowing 98% really means
Be clear-eyed about this part. A 2% deposit means a very large loan against one income, and lenders assess you at 3 percentage points above the actual rate. On a 6% loan you must show you could handle 9%.
Child support counts as income with most lenders, though they treat it differently from wages and some discount it. Family Tax Benefit is accepted by some lenders and not others. This is the single biggest reason two lenders can give a single parent very different answers on the same numbers.
You also start with almost no equity, so if prices dip you could owe more than the home is worth for a while. That only matters if you need to sell, which is an argument for buying somewhere you can stay put.
What else you can stack on top
The 2% deposit is federal. Your state may also give you money:
- A First Home Owner Grant if you are a first home buyer and building new — $30,000 in Queensland, $50,000 in the Northern Territory, $20,000 in Tasmania, $15,000 in South Australia, $10,000 in NSW, Victoria and WA.
- A stamp duty concession, which for a first home buyer is often worth more than the grant.
- Help to Buy, where the government takes an equity share instead, if a 98% loan does not fit your income.
Where to start
Apply through a participating lender, not to the government. Before that, get a broker to look at how each lender treats your child support and benefits, because that single policy difference usually decides how much you can borrow. Our guide to home loans for first home buyers covers the loan features worth insisting on.
FAQs
Does the Family Home Guarantee still exist?
Under a new name. It is now the single parents stream of the Australian Government 5% Deposit Scheme, and the deposit is still 2%.
Do I have to be a first home buyer?
No. This is the part most people miss. Previous ownership does not disqualify you, as long as you hold no other property once the new home settles.
Is there an income limit?
Not any more. The $125,000 cap was removed on 1 October 2025, along with the annual limit on places.
Does child support count as income?
With most lenders, yes, though they treat it differently from wages and some discount it. Family Tax Benefit is accepted by some lenders and not others, which is why two lenders can give very different answers.
What if I have shared custody?
You need at least one dependent child. Shared care generally still qualifies, but lenders assess the child costs in your budget differently depending on the arrangement.
Can I use this and a state grant together?
Yes, if you also meet the state’s rules. The federal deposit help and a state grant or stamp duty concession are separate and stack.
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James Haywood
Financial Services Expert
James has worked with property investors since 2017, helping them scale portfolios on market data rather than guesswork — picking suburbs with room to grow, and structuring the loans around a long-term plan instead of the next purchase.
Through his Property Surfer Program, clients get their purchase structure set up before they buy, access to the market data behind the suburb calls, and automated loan repricing every three months so the rate does not quietly drift upward. Asset protection and risk sit inside the structure rather than being handled afterwards.
He works alongside a referral network across financial planning, accounting, conveyancing, family law and building inspections, so clients are not assembling a team of their own from scratch.