Good news for first home buyers. The federal government has announced that the expansion of the First Home Buyer Guarantee will begin in October – three months earlier than originally promised.
This change is designed to help more Australians enter the property market sooner by reducing one of the biggest barriers to buying a home: the deposit.
From October, eligible first home buyers will be able to purchase a property with as little as a 5% deposit, without having to pay lenders mortgage insurance (LMI). For many, this can save tens of thousands of dollars in upfront costs.
A few key updates will also take effect:
No more annual caps – the previous limit on how many buyers could access the scheme each year will be removed.
Higher property price caps – in recognition of market realities, the maximum property values allowed under the scheme are being lifted:
Sydney: $900,000 → $1.5 million
Melbourne: $800,000 → $950,000
Brisbane: $700,000 → $1 million
With similar increases across other regions.
No income limits – previous restrictions on buyer income will be scrapped, widening access to the scheme.
According to Treasury estimates, the uncapped scheme could issue an extra 20,000 guarantees in the first year alone. The modelling also suggests buyers could save not only on deposit and LMI costs but also on rent, as they’ll be able to enter the market sooner.
Treasury’s modelling indicates that the overall impact on house prices will be modest – around a 0.5% increase over six years.
The government has positioned the scheme as part of a broader plan to support housing affordability. Housing Minister Clare O’Neil also announced a temporary pause on most changes to the National Construction Code until 2029, giving builders some breathing space while maintaining safety standards.
Prime Minister Anthony Albanese said the early start of the scheme is about helping first home buyers achieve their dream of home ownership sooner. Minister O’Neil echoed that sentiment, describing it as a move to give young Australians “a fairer chance” in the market.
While some groups have highlighted that the scheme won’t solve the wider housing affordability challenge on its own, it is expected to provide meaningful help to tens of thousands of buyers.
If you’re a first home buyer looking to get into the market, this could be the opportunity you’ve been waiting for. Buying with a 5% deposit and avoiding LMI can make a significant difference to your upfront costs.
Every buyer’s situation is different. If you’d like to understand whether you could be eligible under the updated First Home Buyer Guarantee, a mortgage broker can walk you through the details and next steps.
Get in touch with us today for a no-obligation chat about your home loan options.
