Big Changes Ahead for the First Home Guarantee Scheme
The First Home Guarantee Scheme has been a helping hand for buyers eager to enter the housing market, supporting Australians to purchase their first home with as little as a 5% deposit and without paying lenders mortgage insurance.
From 1 October 2025, the scheme will become even more flexible. With unlimited places, higher property price caps, and the removal of income thresholds, it’s evolving to better reflect today’s housing market.
For first home buyers, this means more choice, less red tape, and a clearer pathway to home ownership. Here’s everything you need to know.
What is the first home guarantee scheme and why is it important?
The first home guarantee scheme is part of a broader Australian Government approach to improving access to home ownership. It allows eligible first home buyers to purchase a home with a deposit as low as 5%, supported by a government guarantee that reduces the need to pay lenders mortgage insurance through a participating lender.
This deposit scheme is important because it lowers one of the biggest barriers to buying a home. For many Australians, saving a full 20% deposit can take years. The home guarantee scheme helps bridge that gap, making it easier for first home buyers to secure a home loan and enter the housing market sooner.
Who is now eligible under the updated scheme?
Eligibility under the updated home guarantee scheme is still based on meeting both scheme rules and your lender’s standard checks. Under the Australian Government changes, eligible applicants may include:
- First home buyers purchasing a home to live in as their main residence
- Singles and couples who meet eligibility criteria set by the scheme
- Buyers with a minimum deposit as low as 5% applying through a participating lender
- Eligible buyers purchasing within the relevant property price caps for their state or territory
- Australians who meet their lender’s requirements for borrowing capacity, savings history, and credit checks
What kinds of properties and locations are covered by the new home guarantee scheme?
The home guarantee scheme covers a range of property types and locations, provided the home meets Australian Government guidelines and is purchased to live in. Under the scheme, eligible home buyers may be able to purchase the following:
- Homes located in eligible metropolitan and regional areas, based on property price caps set for each state or territory
- New and existing homes that fall within the home guarantee scheme limits
- House and land packages that meet the deposit scheme requirements and are priced within the relevant caps
- Residential properties purchased through a participating lender and used as the buyer’s principal place of residence
- Homes across Australia where the purchase supports long-term home ownership rather than investment
How will these changes impact first home buyers?
The biggest win is flexibility. Eligible buyers can purchase with as little as a 5% deposit while skipping the hefty cost of LMI – a saving that could shave tens of thousands off your initial loan amount and literally years off the savings timeline, helping you step into your first home much sooner.
It also opens the door to more people: couples with stronger incomes, singles looking closer to established amenities, or families chasing a little more space.
With higher property price caps, more established homes, townhouses and turnkey house-and-land packages now fall within reach, especially in growth corridors. In practice, that means a much wider pool of listings will “qualify,” giving buyers more choice at realistic prices.
Ready to explore your first home guarantee options?
The government guarantee scheme changes could make it easier for eligible first home buyers to purchase a home with a smaller deposit and achieve home ownership sooner. If you’re looking to buy a home and want clarity around your eligibility and next steps, Carlisle Homes can help you understand your options and guide you through the early stages of the process.
Carlisle’s house and land packages are a natural fit as well. From value-packed EasyLiving homes designed with first-time buyers in mind, to select Inspire and Affinity Collection packages that now sit comfortably within the new price limits. Get in touch with Carlisle Homes to start your first home journey.