Good News First Home Buyers: The First Home Buyer Guarantee Is Bigger, Better And Sooner Than Expected.
The Australian Government has supercharged the First Home Buyer Guarantee, making it far more accessible for first-time buyers across the country. Here’s everything you need to know…
Key federal changes effective from 1 October 2025
| Feature | Before | After (from 1 October 2025) |
|---|---|---|
| Maximum places | Capped | Unlimited places available |
| Income limits | Yes | No income restrictions |
| Minimum deposit | 20% | 5% |
| LMI requirement | Usually | Not required (no LMI) |
| Price caps example (Sydney) | $900,000 | $1,500,000 |
Key details:
- 5% deposit only: You can now step into the housing market with just a 5% deposit, dropping the traditional 20% requirement.
- No Lenders’ Mortgage Insurance (LMI) required, saving you thousands.
- No income caps: Buyers of all earnings levels are now eligible.
- Unlimited places: The scheme will no longer be capped at a set number each year. All qualifying first home buyers can apply.
- Property price caps have increased to reflect today’s market:
- Sydney: $1,500,000
- Melbourne: $950,000
- Brisbane & Canberra: $1,000,000
- Adelaide: $900,000
- Perth: $850,000
- Hobart: $700,000
- Northern Territory: $600,000
These updates were brought forward to 1 October 2025, three months earlier than initially planned.
Property criteria
You can buy a range of property types under the First Home Buyer Guarantee, including:
- Existing dwellings (established homes).
- Newly constructed homes.
- Off-the-plan purchases.
- House and land packages.
- Land with a separate contract to build.
Key restrictions:
- The property must be a residential dwelling, not commercial or purely investment.
- It must be your principal place of residence, you cannot buy and rent it out straight away.
- Property value must be within the scheme’s price caps for your area (e.g., Sydney $1.5 million, Melbourne $950,000).
- You must move in within 6 months of settlement (or within 12 months if it’s an off-the-plan build).
What this means for First Home Buyers
- Greater accessibility across Australia. No income barriers, relaxed deposit requirements, plus higher price caps make it possible to purchase in more locations.
- More flexibility. Buy into regional and capital city markets without LMI and with lower up-front costs.
- Potential for more competition. Experts expect increased market demand to fuel price pressure, especially in high-demand suburbs.
How does it stack up against other schemes?
These programs are often mentioned together, but they are different schemes with separate rules. Here’s a clear breakdown to avoid confusion:
- Help to Buy lowers loan size with Government equity.
- First Home Buyer Guarantee (FHBG) avoids LMI without losing ownership.
- First Home Owner Grant (FHOG) is a cash grant (but only for new homes under $750,000 in VIC).
| Feature | Help to Buy Scheme | First Home Buyer Guarantee (FHBG) | Victorian First Home Owner Grant (FHOG) |
|---|---|---|---|
| Type | Shared equity – the Government co-owns part of your home | Loan guarantee – you own 100% of the home | One-off grant from the Victorian Government |
| Deposit required | As little as 2% | As little as 5% | Still need a deposit (grant helps boost savings) |
| Government support | Up to 40% (new builds) or 30% (existing homes) | Guarantee of up to 15% of property value with the bank | $10,000 grant for eligible new homes (up to $750,000) |
| Do you pay LMI? | No | No | Yes (unless you qualify separately under FHBG or other schemes) |
| Ownership | Shared – repay the Government’s equity later (on sale, if income rises, or buy back in 5% chunks) | Full – you own the home outright from day one | Full – grant simply reduces upfront cost |
| Number of places | 10,000 places per year (40,000 total) | Unlimited places from 1 Oct 2025 | Not capped (applies if criteria met) |
| Income caps | Yes – $100,000 (single), $160,000 (couple) | None (from 1 Oct 2025) | None |
| Property criteria | New or existing homes | New or existing homes, off-the-plan, house & land | Must be a new build or substantially renovated |
| Property price caps | Sydney $1.3m, Melbourne $950k, Brisbane/Canberra $1m, Adelaide $900k, Perth $850k, Hobart $700k, Darwin $600k | Sydney $1.5m, Melbourne $950k, Brisbane/Canberra $1m, Adelaide $900k, Perth $850k, Hobart $700k, NT $600k | Victoria: new homes up to $750,000 |
| Start date | Expected late 2025 | 1 October 2025 | Ongoing |
| Who it helps most | Buyers with very low deposits who need to shrink loan size | Buyers with 5% deposit who want to avoid LMI | Buyers in Victoria purchasing new homes under $750,000 |
You can read more about the Help To Buy Scheme here.
Next steps for First Home Buyers
- Check your eligibility and lending options now, as we expect high demand once the scheme opens.
- Get a 5% deposit ready and see if your desired area falls under the updated price cap.
- Work with a broker or lender in advance so you’re ready to apply from 1 October 2025.
👉 Book a Consultation with Aintree Group Wealth to review your eligibility and get a head start.
This is general advice only and has not been prepared with your individual situation or needs in mind. For personalised advice, we highly recommend that you seek professional guidance from a qualified adviser.
