Home Guarantee Scheme Changes from 1 October 2025

Changes to the Government Home Guarantee Scheme announced today will make purchasing a home in Australia significantly more accessible for first home buyers. From 1 October 2025, the federal government’s Home Guarantee Scheme will undergo sweeping reforms, removing previous limitations and expanding eligibility for first home buyers looking to purchase a property with 5% deposit. Here’s what you need to know to make the most of these changes.

1. No Income Caps

Income caps will be removed entirely, meaning buyers with higher incomes are eligible for the scheme, broadening access significantly.

Currently, there are income eligibility thresholds of $125,000 for individuals and $200,000 combined for couples.

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2. Property Price Caps Increased To Reflect Real Market Values

The price limits on eligible homes under the scheme will increase substantially. See the current and new caps below.

3. Unlimited Places for First Home Buyers

Currently, the First Home Guarantee Scheme is capped to 50,000 places per year. From 1 October 2025, there will be no limit—any eligible first home buyer with a minimum 5% deposit can access the guarantee

4. Eligibility Criteria That Remains Unchanged

• Minimum Deposit: Genuine savings of 5% of the property value plus fees is still required to qualify.
• Government Guarantee: Up to 15% of the loan is guaranteed by the government, allowing applicants to avoid Lenders Mortgage Insurance (LMI) and get a lower interest rate from the participating lender. Once your loan is reduced to 80% of the value of the property, the Government Guarantee can be removed.
• Individual Eligibility: The home buyer must be an Australian citizen, permanent resident or a New Zealand Citizen on a 444 visa who is over the age of 18 and has not owned a property in Australia in the last 10 years.
• Property Purpose: The property must be for the purpose of living in, this scheme is not eligible for investment properties. Purchasers must intend to move into the property within 6 months of the settlement date.

What is the First Home Guarantee Scheme?

The First Home Guarantee Scheme is an Australian Government initiative that provides a guarantee to eligible home buyers to purchase a home with a deposit of as little as 5% of the property value plus fees, without paying Lenders Mortgage Insurance. This is not a cash payment, it is a guarantee to the lender. Home loans for the scheme are only available through an approved panel of lenders.

How Do I Get More Information?

Our experienced Mortgage Brokers at Assured Lending can give you all the information required regarding the scheme process, eligibility and getting your first home loan. We walk you through the entire process, providing you with a detailed comparison of the loan options available from the participant Home Guarantee Lenders and prepare a home loan application to the chosen lender on your behalf. Contact us to speak to an experienced mortgage broker today.

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