Major Changes to the First Home Guarantee Scheme from October 2025
- Steve Dart
- Oct 9
- 5 min read
The Australian Government has announced significant expansions to the Home Guarantee Scheme that will transform home ownership opportunities for first home buyers across the country. Starting 1 October 2025, these changes will make it easier than ever for eligible buyers to enter the property market with as little as a 5% deposit and no Lenders Mortgage Insurance.
What is the First Home Guarantee Scheme?
The First Home Guarantee Scheme helps eligible first home buyers purchase a property with a deposit as low as 5% by providing a government guarantee to approved lenders. This eliminates the need for Lenders Mortgage Insurance (LMI), which can save buyers thousands of dollars and reduce the barrier to home ownership.
Previously, the scheme had limited places available each year, strict income caps, and lower property price thresholds that often excluded buyers in major cities and regional centres where property prices have grown significantly.
Revolutionary Changes from October 2025
Unlimited Places Available
The most significant change is the removal of the annual cap on guarantee places. Previously, the scheme offered a limited number of guarantees each financial year, which meant eligible buyers could miss out simply due to timing. From October 2025, all eligible first home buyers can access the scheme without worrying about availability.
One of the biggest barriers has been lifted with the removal of income caps. Previously, single applicants earning more than $125,000 or couples earning more than $200,000 were excluded from the scheme. This restriction prevented many working professionals, particularly in higher-cost cities, from accessing the guarantee.
Substantially Increased Property Price Caps
Recognising that property prices have grown significantly since the scheme's introduction, the government has increased price caps across all states and territories:
Queensland Changes:
● Brisbane and regional centres (Gold Coast, Sunshine Coast): $700,000 to $1,000,000
● Other Queensland areas: $550,000 to $700,000
New South Wales Changes:
● Sydney and regional centres (Newcastle, Illawarra): $900,000 to $1,500,000
● Other NSW areas: $750,000 to $800,000
Victoria Changes:
● Melbourne and Geelong: $800,000 to $950,000
● Other Victorian areas: remains at $650,000
These increases reflect the reality of current property markets and will allow first home buyers to consider a much broader range of properties in their preferred locations.
Simplified Regional Access
The Regional First Home Buyer Guarantee will be merged into the broader First Home Guarantee, simplifying the application process. Regional centres now include the Illawarra, Newcastle and Lake Macquarie in NSW; Geelong in Victoria; and the Gold Coast and Sunshine Coast in Queensland.
What This Means for First Home Buyers
These changes represent the most significant expansion of government support for first home buyers in recent years. The practical implications include:
Immediate Benefits:
● Access to properties previously outside the scheme's price limits
● No need to wait for scheme places to become available
● Higher-income earners can now participate
● Simplified application process
Financial Impact: The removal of LMI can save buyers thousands of dollars. For example, on a $800,000 property with a 5% deposit, LMI could cost between $15,000-$25,000. The guarantee scheme eliminates this cost entirely.
Market Access: With higher price caps, first home buyers can now consider properties in areas that were previously unaffordable under the scheme, including many suburbs in major cities and popular regional centres.
Important Considerations
While these changes are positive for first home buyers, the scheme still has eligibility criteria:
● You must be an Australian citizen or permanent resident
● You cannot have previously owned property in Australia
● The property must be your primary residence
● You must live in the property for at least six months after settlement
Additionally, lenders will still assess your borrowing capacity using their standard criteria, so having a 5% deposit doesn't guarantee loan approval. Your income, expenses, credit history, and employment stability all remain important factors.
Timing Your Purchase
The current scheme remains available with existing price caps and eligibility criteria until 30 September 2025. If you're eligible under current rules and have found a suitable property, there's no need to wait. However, if current price caps are limiting your options, the October changes may open up new possibilities.
Getting Professional Guidance
With such significant changes to the scheme, professional advice is more valuable than ever. Understanding how these changes affect your specific situation, what properties you can now consider, and how to structure your application for the best outcome requires expert guidance.
At Astute East Brisbane, we're closely monitoring these changes and helping clients understand how the expanded scheme can support their home ownership goals. We work with lenders who participate in the scheme and can guide you through the application process.
Contact our team on (07) 3667 8988 to discuss how the First Home Guarantee Scheme changes might benefit your situation. We'll help you understand your options, assess your eligibility, and develop a strategy to make your first home purchase a reality.
This information is current as at September 2024. Scheme details may be subject to change. We recommend confirming current eligibility criteria with Housing Australia and seeking professional advice for your specific circumstances.
Disclaimer:
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