Major Changes to First Home Buyer Scheme from October 2025: What You Need to Know
If you’ve been struggling to get into the housing market, help is on the way.
From 1 October 2025, the Australian Government will introduce significant reforms to the Home Guarantee Scheme (HGS), making the First Home Buyer Scheme easier for more Australians to purchase their first home with just a 5% deposit, and without paying Lenders Mortgage Insurance (LMI).
These updates are designed to better match today’s property market conditions and remove previous eligibility barriers.
Source: Housing Australia – Unlimited places & higher caps from 1 October 2025
What’s Changing?
According to Housing Australia, Here’s a quick summary of the new changes coming into effect:
| Feature | Before Oct 2025 | From 1 Oct 2025 |
| Scheme Places | Capped annually (e.g. 35,000 places) | Unlimited access for eligible buyers |
| Income Thresholds | $125,000 (single) / $200,000 (couple) | Income limits removed |
| Property Price Caps | Set at outdated market levels | Significantly increased caps across all states |
| Regional Access | Separate Regional Guarantee | Merged into one streamlined scheme |
These changes mean more flexibility, broader eligibility, and greater purchasing power for aspiring homeowners.
Updated Property Price Caps from 1 October 2025
You can see the full list of property price cap on this link housingaustralia.gov.au
Why This Matters
- Why This Matters
- More First Home Buyers Can Now Enter the Market
- By removing income caps and lifting property thresholds, the Scheme is now accessible to a broader range of Australians, including:
- Professionals earning above previous income limits
- Couples with dual incomes
- Buyers in expensive cities like Sydney or Brisbane
Save on LMI and Buy Sooner
LMI can cost up to $30,000 if you don’t have a 20% deposit. Under the HGS:
- Buy with just 5% deposit
- Avoid paying Lenders Mortgage Insurance
- Still access competitive loan products
Better Access for Regional Buyers
The Regional First Home Buyer Guarantee will be folded into the broader First Home Guarantee, simplifying the process for rural and regional Australians.
Who’s Eligible?
As of 1 October 2025, to access the Scheme, you must:
- Be a first home buyer
- Be an Australian citizen or permanent resident
- Have at least a 5% deposit
- Intend to live in the property
- Purchase within the relevant price cap for your area
No income cap
Unlimited scheme places
How to Apply
Getting started is easy, here’s a simple step-by-step:
- Check your eligibility using the Housing Australia website.
- Save a minimum 5% deposit.
- Choose a participating lender (includes major banks and regional lenders).
- Submit an application — your lender will manage the process with Housing Australia.
Official Application Process – https://www.housingaustralia.gov.au/media/unlimited-places-higher-property-price-caps-first-home-buyers-1-october-2025
To read the Australian Government announcement, click here.
