From 1 October 2025, the government’s First Home Guarantee will be expanded, giving more Australians the chance to buy a home with as little as a 5% deposit. 

If you’re planning to purchase your first property — or simply keeping an eye on the market — these updates could play a big part in shaping your next move this spring. 

What is the First Home Guarantee? 

The First Home Guarantee sits within the Home Guarantee Scheme, a government initiative that helps buyers with smaller deposits enter the property market sooner. 

Here’s how it works: 

• Buyers with at least a 5% deposit can purchase a home without paying lender’s mortgage insurance (LMI). 
• Housing Australia guarantees up to 15% of the property’s value to the lender, allowing you to borrow up to 95% of the purchase price. 
• To qualify, you must be a first-home buyer or not have owned property in Australia for the past 10 years (for both applicants if applying jointly). 

Until now, strict income caps, property price limits and regional restrictions applied, narrowing access to the scheme. 

What’s changing from 1 October 2025? 

The government has decided to bring forward reforms originally planned for 2026. The updated scheme will make it easier for more Australians to participate. 

Key changes include: 

• No place limits – any first-home buyer in Australia with a 5% deposit can apply. 
• No income caps – higher-income earners are now eligible. 
• Increased property price caps – e.g., Sydney’s cap rises from $900,000 to $1.5 million, while Brisbane’s lifts from $700,000 to $1 million. 
• Simpler regional access – the Regional First Home Buyer Guarantee will merge into the expanded scheme. 

What does this mean for buyers? 

For many first-home buyers, the scheme could significantly cut the time it takes to save a deposit. 

For example: 

• Melbourne: With a median home value of $803,242, a 20% deposit would take around 9 years to save ($160,685). Under the scheme, a 5% deposit of $40,171 could be saved in just 2 years. 
• Sydney: With a median home value of $1,228,435, saving a 20% deposit ($245,687) might take 13 years. With the scheme, a 5% deposit of $61,422 could be reached in about 3 years. 

What about property prices? 

The scheme will help more people get into the market sooner — but it may also increase competition. Treasury modelling suggests the changes could lift house prices by around 0.5% over six years. Other experts warn that, combined with falling interest rates, the effect could be stronger, potentially adding pressure to affordability. 

Want to know if you’re eligible? 

If you’re curious about how the new rules apply to you, we can help. As your Broker, we’ll: 

• Check your eligibility and borrowing power 
• Organise pre-approval with a participating lender 
• Guide you step by step through your home loan application 

📞 Get in touch today to start the conversation.