Home Guarantee Scheme: What First Home Buyers Should Know

Summary:

The First Home Guarantee Scheme helps first-time buyers enter the property market sooner with lower upfront costs and government-backed support.

• Buyers can secure a home loan with as little as a 5% deposit and avoid Lenders Mortgage Insurance (LMI).
• From the 1st of October 2025, there will be no income caps, higher property price limits, and unlimited places for eligible buyers.
• The scheme makes homeownership more attainable, especially with guidance from a local mortgage broker like Fox Home Loans on the Sunshine Coast.

What is the Home Guarantee Scheme?

The Home Guarantee Scheme is an Australian Government initiative designed to help eligible first-time home buyers purchase a home sooner. By providing a government guarantee, the scheme as Housing Australia notes, “gives all Australian first home buyers the chance to enter the market with a deposit of as little as 5% and avoid Lenders Mortgage Insurance”.

LMI is usually required by lenders when a borrower has a deposit smaller than 20% of the property’s purchase price. It protects the lender in case the borrower cannot repay the loan, but it is an additional cost that can run into thousands of dollars.

Key Changes to the First Home Guarantee Scheme

Significant updates to the First Home Guarantee Scheme which will take effect on the 1^st of October 2025 are:

• Unlimited Places: Housing Australiaconfirms, “From the 1^st of October, the scheme will remove limits to the number of Government guarantees available.” This means more first-time home buyers can access support.
• No Income Caps: Higher-income buyers can now participate in the scheme, expanding opportunities for first home guarantee scheme applicants.
• Higher Property Price Caps: To accommodate rising property values, the scheme introduces higher price caps in various regions for homes. For example, in Queensland’s capital city and regional centres, the cap increases from $700,000 to $1,000,000. This means buyers can now buy properties at a higher price that were previously outside the scheme’s limits.

Why the Home Guarantee Scheme Matters for First-Time Buyers

These updates to the First Home Guarantee Scheme make it easier than ever for first-time home buyers to enter the property market. With no income caps, higher property price limits, and the removal of lenders mortgage insurance (LMI), the scheme helps reduce upfront costs and makes homeownership more attainable. More Australians, like yourself, can now take advantage of a government-backed loan with as little as a 5% deposit.

Get Expert Help from Your Sunshine Coast Mortgage Broker

Contact Fox Home Loans today! Your local mortgage broker on the Sunshine Coast today for personalised guidance and support in navigating the updated Home Guarantee Scheme.

Our team is here to help you take the first step towards homeownership!