The dream of owning your own home can often feel a world away, particularly in Australia’s competitive property market. Saving up for a deposit is a major hurdle for many. But with the Albanese Government’s expanded Home Guarantee Scheme (HGS), that journey might have just become a whole lot shorter.
From October 1, 2025, the government is making a significant change to its long-running program, designed to get more Aussies into their own homes sooner. But what exactly is it, and how does it work?
We’ve put together a list of frequently asked questions to help you understand the new rules.
FAQs About the Home Guarantee Scheme
What is the Home Guarantee Scheme?
The Home Guarantee Scheme is a federal government initiative that helps eligible first home buyers purchase a property with a smaller deposit. Normally, if you have less than a 20% deposit, lenders require you to pay costly Lenders Mortgage Insurance (LMI). With the HGS, the government acts as a guarantor for a portion of your home loan, typically up to 15%, so you can avoid LMI entirely. This can save you tens of thousands of dollars in upfront costs.
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What’s the key change happening on October 1, 2025?
From October 1, 2025, the scheme is being expanded to all eligible first home buyers, with the removal of annual place limits and income caps. Previously, there were a limited number of spots available each financial year, which created a stressful race to secure a place. The new rules mean that every eligible applicant can now use the scheme.
What’s the minimum deposit I need?
You will need a minimum deposit of just 5% of the property’s value. The government’s guarantee covers up to 15% of the loan, eliminating the need for LMI, which is typically required for low-deposit loans.
Have the property price caps changed?
Yes, the property price caps have been significantly raised across every state and territory to better reflect current market conditions. For example, the cap for Sydney and its regional centres has jumped from $900,000 to $1.5 million.
Do I still need to meet any eligibility criteria?
Yes. You still need to be an Australian citizen or permanent resident, at least 18 years old, and you must intend to live in the home as an owner-occupier. You will also need to meet your lender’s own credit criteria.
Will the Home Guarantee Scheme make homes more expensive?
While the scheme is designed to help first home buyers, some experts have raised concerns that by creating more competition in a market with a limited supply of homes, it could put upward pressure on prices. To understand how this could affect the market, read our detailed analysis:
How The Home Guarantee Scheme Will Inflate The Australian Property Market.
Is the scheme just for houses, or can I buy an apartment or townhouse?
The scheme supports the purchase of a wide range of properties, including existing houses, townhouses, and apartments, as well as house-and-land packages and off-the-plan homes.
Do I still get stamp duty concessions with the scheme?
The HGS is a federal initiative, so any stamp duty concessions are separate and are determined by your state or territory government. Many states, including NSW, offer stamp duty exemptions or concessions for first home buyers, so it’s worth checking your state’s specific rules to see what you’re eligible for.
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Key Changes to the Home Guarantee Scheme (Oct 2025)
| Feature | Before 1 October 2025 | After 1 October 2025 |
|---|---|---|
| Annual Place Limits | Limited places (e.g., 35,000 for FHSG) [1, 2] | Unlimited places [3, 4, 5, 6, 7, 8] |
| Income Caps | $125,000 (single) or $200,000 (joint) [1, 2] | Removed [3, 4, 5, 6, 7, 8] |
| Minimum Deposit | 5% [1, 4, 2] | 5% [1, 4, 6, 7, 8] |
| LMI Requirement | Waived for eligible participants [1, 4, 2, 9] | Waived for all eligible participants [4, 6, 7, 8, 10] |
| Regional Access | Separate Regional First Home Buyer Guarantee [1, 2] | Unified under a single First Home Guarantee [3, 4, 5] |
| Sydney Price Cap | $900,000 [1, 6, 7, 8] | $1,500,000 [3, 4, 5, 6, 7, 8] |
| Melbourne Price Cap | $800,000 [1, 6, 7, 8] | $950,000 [3, 4, 5, 6, 7, 8] |
| Brisbane Price Cap | $700,000 [1, 6, 7, 8] | $1,000,000 [3, 4, 5, 6, 7, 8] |
New Home Guarantee Scheme Price Caps vs. August 2025 Median House & Unit Prices
| Feature | Before 1 October 2025 | After 1 October 2025 |
|---|---|---|
| Annual Place Limits | Limited places (e.g., 35,000 for FHSG) [1, 2, 11] | Unlimited places [3, 4, 5, 6, 7, 8, 2, 11, 12] |
| Income Caps | $125,000 (single) or $200,000 (joint) [13, 1, 14, 2] | Removed [3, 4, 5, 6, 7, 8, 2, 11] |
| Minimum Deposit | 5% [13, 1, 14, 2, 11] | 5% [13, 1, 3, 4, 14, 5, 6, 7, 8, 2, 10] |
| LMI Requirement | Waived for eligible participants [13, 1, 14, 2, 11] | Waived for all eligible participants [13, 1, 3, 4, 14, 5, 6, 7, 8, 10, 9, 11, 12] |
| Regional Access | Separate Regional First Home Buyer Guarantee [1, 2] | Unified under a single First Home Guarantee [3, 4, 5] |
| Sydney Price Cap | $900,000 [1, 6, 7, 8] | $1,500,000 [3, 4, 5, 6, 7, 8] |
| Melbourne Price Cap | $800,000 [1, 6, 7, 8] | $950,000 [3, 4, 5, 6, 7, 8] |
| Brisbane Price Cap | $700,000 [1, 6, 7, 8] | $1,000,000 [3, 4, 5, 6, 7, 8] |
| Perth Price Cap | $600,000 [1, 6] | $850,000 [3, 4, 6] |
| Adelaide Price Cap | $600,000 [1, 6] | $900,000 [3, 4, 6] |
| Hobart Price Cap | $600,000 [1, 6] | $700,000 [3, 4, 6] |
| ACT Price Cap | $750,000 [1, 6] | $1,000,000 [3, 4, 6, 8, 2] |
| NT Price Cap | $600,000 [1, 6] | $600,000 [3, 4, 6] |
Sources
- https://www.housingaustralia.gov.au/first-home-guarantee
- https://www.connollysuthers.com.au/changes-to-the-first-home-guarantee-system/
- https://www.mortgagechoice.com.au/news/how-the-first-home-buyer-5-deposit-scheme-could-backfire/
- https://aland.com.au/what-the-october-1-changes-mean-for-first-home-buyers/
- https://prosperityassociates.com.au/blog/major-expansion-of-home-guarantee-scheme-from-1-october-2025
- https://ensurelegal.com.au/first-home-buyers-guarantee-expanded-on-1-october-2025-5-deposit-scheme-opens-doors-to-more-australians/
- https://www.housingaustralia.gov.au/home-guarantee-scheme
- https://www.housingaustralia.gov.au/media/unlimited-places-higher-property-price-caps-first-home-buyers-1-october-2025
- https://www.sbs.com.au/news/article/lifting-caps-from-first-home-buyer-scheme-will-help-some-but-fuel-wider-price-increases/qufj0whee
- https://www.eventusfinancial.com.au/blog/more-first-home-buyers-to-benefit-from-5-percent-deposit-scheme-from-october
- https://www.sbs.com.au/news/article/first-home-buyers-score-early-access-to-deposit-scheme/vpryr80bt
- https://www.pm.gov.au/media/albanese-government-delivers-5-deposits-all-first-home-buyers-sooner
- https://www.brokerdaily.au/property/20781-think-twice-expert-slams-new-first-home-buyer-scheme
- https://www.commbank.com.au/home-loans/home-guarantee-scheme.html
- https://www.housingaustralia.gov.au/sites/default/files/2022-10/first-home-loan-deposit-scheme-fact-sheet-19-june-2021.pdf
- https://alp.org.au/news/labor-to-deliver-5-deposits-for-all-first-home-buyers-and-build-100-000-homes/
