How to Combine First Home Guarantee, FHSS and Savings for Off‑the‑Plan Deposits

Buying an off‑the‑plan apartment as your first home, you can often get in with a smaller upfront deposit and more time to save.

The question most people ask is: can I use the First Home Guarantee, the First Home Super Saver (FHSS) scheme and my own savings together to cover the deposit and still settle safely later?

Yes, you usually can combine them — but the rules, timing and lender policies are unforgiving. A mis-step on dates or assumptions can leave you scrambling for cash 18–36 months from now, when the building is finished and the real test of your plan arrives.

This guide walks through, step by step, how the Guarantee, FHSS and savings work for off‑the‑plan, what order to do things in, and how to know if your plan is safe before you sign.

Sequencing FHSS, savings and First Home Guarantee is critical for off‑the‑plan deposits.

1. Quick summary: how the schemes work for off‑the‑plan

1.1 First Home Guarantee in one minute

The First Home Guarantee (FHG) is an Australian Government scheme that lets eligible first‑home buyers purchase with as little as 5% deposit without paying Lenders Mortgage Insurance (LMI). The National Housing Finance and Investment Corporation (NHFIC, now Housing Australia) provides a guarantee to the lender for up to 15% of the property value.

Key points for off‑the‑plan:

• It’s not cash for your deposit; it’s a guarantee at settlement.
• You still need to fund the contract deposit for the developer (typically 5–10% of the price).
• A participating lender must approve your loan under FHG at settlement time, not just now.
• There are price caps, income caps and owner‑occupier requirements that must still be met when you settle.

1.2 FHSS in one minute

The First Home Super Saver (FHSS) scheme lets you make voluntary contributions into super, then withdraw them (plus associated earnings) later to help with your first‑home deposit.

Key points for off‑the‑plan:

• You can release up to $50,000 of eligible contributions (per person) under current rules.
• You must apply for a FHSS determination and release from the ATO.
• After release, you have 12 months to sign a contract (or 24 months if you ask for an extension), or you may need to recontribute.
• You can use FHSS money for the developer deposit and settlement — it’s just cash once released.

1.3 Why combining schemes is trickier for off‑the‑plan

Off‑the‑plan properties introduce extra moving parts:

1. Long gap between contract and settlement (often 18–36 months).
2. Valuations can fall below the contract price at settlement.
3. Interest rates, incomes and lending rules can change while you wait.
4. You’re effectively running two approval processes:
   • A loan strategy now (to know if the plan is feasible).
   • The actual formal approval under FHG just before settlement.

When you layer FHG + FHSS + savings into this, the order and timing matter.

If you haven’t already, it’s worth reading our broader comparison of buying off‑the‑plan versus established homes: /insights/off-the-plan-vs-established-first-home-finance-pros-cons.

2. The building blocks: deposit, LVR and schemes

Before we sequence everything, it helps to map the moving parts.

2.1 Typical deposit structure for off‑the‑plan

Most off‑the‑plan contracts follow this pattern:

• Contract deposit to developer at exchange: usually 5–10% of the price.
• Nothing more until settlement (apart from variations or upgrades you agree to).
• At settlement, your home loan + remaining savings + FHSS complete the price and costs.

For a $750,000 apartment:

• Contract deposit at 10% = $75,000.
• Remaining price at settlement = $675,000 plus costs (say $20,000 for stamp duty/concessions, legal, adjustments etc.).

2.2 How the First Home Guarantee fits into this picture

Under FHG, the lender can write a loan up to 95% of the property value (or more, depending on lender policy) without you paying LMI, because the government guarantees the gap between your deposit and 20%.

For a $750,000 apartment (illustrative only):

• 95% of $750,000 = $712,500 maximum loan under many FHG structures.
• If you borrow $712,500 and price is $750,000, your total deposit/equity is $37,500 (5%).

But note the subtlety:

• The lender looks at value at settlement, not contract price.
• If the valuation comes in at $700,000 instead of $750,000, 95% is $665,000. You may need more cash or the deal may no longer fit FHG limits.

2.3 How FHSS funds plug the gap

Once released from super, FHSS funds are just cash in your bank account.

You can use them for:

• The developer deposit at exchange; and/or
• Top‑up funds at settlement alongside your normal savings.

The timing challenge is making sure the FHSS release is available when you need to:

• If you want to use FHSS for the developer deposit, you must have:
  • FHSS determination and release completed before exchange, or
  • Use your own cash/other sources now and reimburse/replace your savings with FHSS when it comes out.

3. Strategy first: is combining schemes right for you?

3.1 Quick readiness check

Use this 7‑point diagnostic before you commit to a combined‑scheme off‑the‑plan plan:

1. Income stability: Is your income reasonably secure for the next 3–5 years, including any planned changes (kids, business, study)?
2. Buffer: Can you keep 3–6 months of living costs + loan repayments in cash/offset after settlement (6–12 months if self‑employed)? (See knowledge facts 12 and 16.)
3. Debt comfort: At current rates +3%, do projected repayments stay under 30–35% of your after‑tax income? (Knowledge facts 6 and 11.)
4. Super strategy: Will FHSS withdrawals still leave your super at a level you’re comfortable with, given your age and retirement plans?
5. Timeline flexibility: If settlement is delayed or brought forward by 6–12 months, can you cope financially and logistically?
6. Other commitments: Are you also planning to start a business, have kids, or upgrade a car within this period?
7. Exit options: If something goes wrong (valuation shortfall, income drop), do you have backup strategies (family gift, guarantor, downsizing the plan, selling another asset)?

If you can honestly tick at least 5 out of 7, combining FHG + FHSS + savings might be a fit. If not, consider a simpler path or a smaller purchase before signing.

For a broader view of risk when mixing multiple supports, see our checklist: /insights/risk-management-checklist-mixing-guarantees-gifts-schemes-off-the-plan.

3.2 Who this strategy suits

Combining schemes can work well for:

• Younger buyers with time to rebuild super later.
• Professional couples with strong income and stable employment.
• Self‑employed buyers with clear financials and good cash buffers.
• Renters who want time to keep saving during the build.

It’s less ideal for:

• People already close to retirement who can’t rebuild super.
• Anyone with very volatile income and thin savings buffers.
• Those uncomfortable with the uncertainty of off‑the‑plan builds.

A joined‑up loan and tax strategy reduces risk when combining deposit supports.