Home Guarantee Scheme 2025 – what First Home Buyers need to know.
Here’s a summary of the new/updated First Home Buyers / Home Guarantee / Help-to-Buy schemes as announced by the Australian Government in 2025 — what they are, what’s changed, and how they work. If you like, I can also pull up how it applies in Victoria / your city. Read more on First Home Guarantee eligibility below.
What is the First Home Guarantee Scheme?
There are a few overlapping programs, but the main ones are:
- Home Guarantee Scheme 2025 (includes the First Home Guarantee)
This helps first home buyers get into a home with a low deposit (as little as 5%) and avoid paying Lenders Mortgage Insurance (LMI). Under this scheme, the government guarantees part of the loan for the lender. - Help to Buy Equity Scheme (Shared Equity Scheme)
First home buyers partner with the government, which contributes equity in the home (so you borrow less). For new homes, the government may take up to 40% equity; for existing homes, up to 30%. You still need a small minimum deposit (~2%) and the rest is financed.
Property Price Caps for the Scheme across Australia
Read more here
What’s New / What Has Changed (from 1 October 2025)
From 1 October 2025, the government is expanding / updating the First Home Guarantee Scheme to make it more accessible. Key changes which include Property Price Caps for first home guarantee :
| Feature | Old / Before Oct 2025 | New / After Oct 2025 |
|---|---|---|
| Place limits (number of guarantees available) | There were caps on how many first home buyers could be guaranteed each year. | Removed — there will be no limit on the number of government guarantees. All eligible first home buyers who meet the criteria can access it. read more |
| Income caps | Previously, there were income thresholds to qualify. | These are being removed for the First Home Guarantee. So, regardless of income, you may be eligible (if other criteria met). read more |
| Property price caps | There were limits on how expensive a property could be to be eligible under each region. These caps were lower than many current median house prices in many cities. | The price caps are being increased in many places. For example, in Sydney/metro NSW the cap is moving up to $1,500,000; Melbourne ~$950,000; Brisbane ~$1,000,000 etc. read more |
| Regional scheme | There was a separate “Regional First Home Buyer Guarantee” for properties outside major metro areas. | From 1 October, that specific regional guarantee is being merged under the general First Home Guarantee, simplifying access across Australia. read more |
What You Need to Be Eligible (Typical Requirements)
While specifics vary for the First Home Buyers assistance programs they are dependent on location, home purchase prices and eligibility, here are the general eligibility criteria:
- You must be a first home buyer (haven’t owned a property in Australia in some period).
- Be an Australian citizen or permanent resident.
- Be aged 18 or over.
- Have saved a deposit (in the Home Guarantee scheme, 5% is enough under the new changes).
- Lock in a home within the new price caps applicable for your area. more
For Help to Buy, there are additional constraints:
- The property can be new or existing (with different government share %. ) read more
- Must live in the property as your principal residence.
- Income caps still apply (for Help to Buy – separate from the First Home Guarantee). For example, single applicants ~$100,000; couples or single parents ~$160,000. read more
Key Benefits & What It Means in Practice
- You can enter the property market sooner, since you don’t need a large deposit (~20% is traditional).
- Avoid paying Lenders Mortgage Insurance (LMI), which can be very expensive if your deposit is small.
- With the expanded price caps and removed income limits, many more people who previously “just missed out” will now be eligible.
- The financial saving can be substantial, both in upfront costs (deposit + insurance) and in saving time.
How does the Australian Population Growth affect property prices and rental yields?
