From October 1, 2025, first home buyers across Australia will find the dream of homeownership more achievable than ever. The Federal Government has announced significant updates to the Home Guarantee Scheme, and the news couldn’t be more exciting.
These changes mean you can now step into the market with as little as a 5% deposit, avoid Lenders Mortgage Insurance (LMI) and best of all, enjoy broader access thanks to higher property price caps and the removal of income restrictions.
What’s Changing?
From October 1, the Home Guarantee Scheme will become more accessible than ever before. Income restrictions are being lifted, allowing more purchasers to take advantage of the scheme. Property price caps are also increasing, keeping pace with today’s market and making homes that were previously out of reach more accessible. And to complete the good news, access will now be simpler, with one nationwide scheme covering both metro and regional buyers. So if you’re eligible and have your 5% deposit ready, you can apply with confidence.
Updated Property Price Caps
Location
Current Cap
New Cap
NSW – Sydney & Regional Centres
$900,000
$1,500,000
VIC – Melbourne & Geelong
$800,000
$950,000
QLD – Brisbane, Gold Coast & Sunshine Coast
$700,000
$1,000,000
WA – Perth
$600,000
$850,000
SA – Adelaide
$600,000
$900,000
TAS – Hobart
$600,000
$700,000
ACT
$750,000
$1,000,000
With these new thresholds, homes that were once out of reach are now firmly within budget.
Why This Matters
This is one of the most significant steps towards helping Australians into their first homes in years. By lifting restrictions and increasing price caps, the scheme enables many buyers who were previously excluded from the market to finally make the leap.
The savings are substantial. For example, purchasing a $950,000 home under the new scheme requires only a 5% deposit of around $47,500, plus government fees of about $54,677, totalling close to $102,000. Previously, first home buyers needed closer to $140,000 once LMI was included. That’s a difference of around $40,000 staying in your pocket.***
And with no limit on the number of guarantees available, once you’ve saved your deposit, the path to homeownership has never been more straightforward.
***Figures are indicative only
Timing is Everything
Historical data indicate that when interest rates decline, property prices tend to increase. We’re already seeing borrowers’ purchasing power increase with each rate cut, sometimes by as much as $20,000 per cut. Combine that with the new scheme, and the impact is enormous.
That’s why it’s essential to start preparing now. Buyers who are ready with their strategy, paperwork, and approvals in place will be the ones to move quickly when October 1 arrives.
The Takeaway
October 1 marks a significant milestone for first-time home buyers. If you’ve been saving and waiting, this is the moment to take action: less upfront cost, more property choice, and far fewer restrictions standing in your way.
At Land4Sale, we’ve been guiding first home buyers for decades. Our team is here to help you understand your options, explore communities, and take confident steps towards owning your first home.
