First Home Guarantee: What Today’s Changes Mean for You

From today, the First Home Guarantee (FHG) enters a new chapter. For years, the scheme has helped first-time buyers purchase with as little as a 5% deposit while avoiding Lenders Mortgage Insurance (LMI).

That core benefit isn’t changing – what’s new from October 1 are the rules around who can apply, what they can buy, and how much flexibility they’ll have.

With unlimited places, higher property price caps, and the removal of income thresholds, the scheme is now more accessible than ever.

To unpack what this means in practice, Andrew Gooding, Chief Commercial Officer with Carlisle’s finance partner Mortgage Domayne, lays out his expert insights on what this means for eager first-home buyers.

Unlimited places and no income caps

One of the strongest signs that the scheme was working has always been its popularity — in past years, tens of thousands of places were taken up quickly, reflecting just how valuable that 5% deposit pathway was for first-home buyers. But with caps in place, some may have missed out.

From now on, that changes. There’s now no ceiling on the number of places in the scheme and no income limits holding higher-earning households back.

“This is a major win for dual-income professionals and families whose incomes grew beyond the previous limits,” says Andrew. “They may be earning well, but still haven’t been able to save a 20% deposit. The removal of caps means they can finally take advantage of the scheme.”

Higher property price caps

With Melbourne and Geelong’s cap rising from $800,000 to $950,000 – alongside increases across other major cities – the scheme is catching up with real-world market conditions. The result? An expanded playing field that puts more homes within reach.

“This change brings more established homes, townhouses, and turnkey house-and-land packages into scope,” Andrew explains. “Especially in growth corridors, buyers now have a much wider pool of listings that qualify at realistic metro prices.”

For Carlisle customers, it’s a win too. A wide range of house and land packages now fall well within the new cap – from EasyLiving designs tailored for value-minded buyers, right through to select Inspire and Affinity Collection homes. It opens the door to more suburbs, better amenities, and more choice.

The power of a 5% deposit

Being able to buy with just a 5% deposit – making you exempt from incurring LMI – is the scheme’s standout advantage. To put it into perspective, Andrew shared some illustrative calculations on a $750,000 Carlisle house and land package:

• 20% deposit: $150,000 required to avoid LMI
  
  
• Minimum 5% deposit under FHG: $37,500
  
  
• Upfront saving: $112,500
  
  
• Plus avoided LMI: typically $30k–$35k added to the initial mortgage
  
  

“That’s years of extra saving time wiped off the timeline,” says Andrew. “At a savings rate of $2,000 a month, you’re looking at nearly five years saved. Even at $3,000 a month, it’s over three years. This can literally be the difference between renting and owning your own home much sooner.”

Risks and advice

Of course, Andrew notes there are a few things buyers should keep in mind:

• Price pressure risk: More demand could push prices higher in tight markets.
  
  
• High-Loan-to-Value (LVR) sensitivity: Buying with 5% equity means less buffer if interest rates rise or property prices dip.
  
  
• Cap mechanics: For house and land packages, the combined land and build price must sit under the cap.

So what’s his top advice? “Get pre-assessed early to confirm borrowing power, then be ready to act,” Andrew says. “With more stock and more buyers qualifying, speed and preparation are critical.”

Your first home, made easier

With today’s changes, more Australians can step into their first home sooner – and with Carlisle’s EasyLiving, Inspire and Affinity ranges, there are smarter options at every price point.