Expanded home guarantee scheme opens new doors for first home buyers

The expanded Home Guarantee Scheme, effective 1 October 2025, lets eligible first home buyers purchase with a 5% deposit and avoid lenders mortgage insurance. Income caps and location limits have been removed and property price caps have risen, including $1.5 million in Sydney and $1 million in South East Queensland. Eligibility criteria and property price caps apply.

The federal government’s expanded Home Guarantee Scheme, effective 1 October 2025, offers greater access to home ownership for first home buyers across Australia. By removing income and location restrictions and increasing property price caps, eligible buyers can purchase homes with a 5% deposit while avoiding lenders mortgage insurance (LMI). This reform significantly broadens the scheme’s reach and makes affordable housing more accessible.

What are the Home Guarantee Scheme changes?

Income caps and place eligibility limits have been removed. Property price caps increased substantially: Sydney’s from $900,000 to $1.5 million; South East Queensland’s to $1 million; Adelaide’s to $900,000. Consequently, 63.1% of suburbs nationally now qualify, nearly doubling access compared to before.

How does the Home Guarantee Scheme work for first home buyers?

Buyers can secure a mortgage with a 5% deposit guaranteed by the government, eliminating the need for LMI and lowering upfront costs. Eligibility requires genuine savings over three months and meeting lender serviceability criteria. How to get mortgage ready in 2026.

How the changes improve affordability and accessibility

The expanded scheme supports younger and lower-income Australians, especially those without parental financial backing. Economist Kaytlin Ezzy notes, “Since the caps were last revised in 2022, values across the mid-sized capitals have grown significantly, which has seen first home buyers reliant on the scheme to purchase a house essentially priced out. The new price caps are more in line with each region’s median values. This will create a more equitable starting point and provide more options for those looking to get on the property ladder, particularly those who don’t have parental support.”

How Attain Loans can help first home buyers

Attain Loans is a local mortgage broker in Melbourne’s western suburbs that provides expert support tailored to the expanded scheme, helping clients assess eligibility, find suitable loans, and navigate applications from start to finish. Attain Loans doesn’t administer the scheme, and eligibility criteria and caps apply.

With more opportunities than ever, it’s worth exploring your first home buyer loan options – keeping in mind that a smaller deposit means a larger loan and more interest over the life of the loan. Contact Attain Loans today to start your home ownership journey. Shared equity and other low-deposit pathways.

This article is general information only and doesn’t take into account your objectives, financial situation or needs. Consider whether it’s appropriate for you and speak with a licensed professional before making a decision.

Further questions

This is general information only and is subject to change at any given time. Your complete financial situation will need to be assessed before acceptance of any proposal or product.