Buying your first home has always felt out of reach for many Australians. A 20 percent deposit, plus the extra cost of Lenders’ Mortgage Insurance (LMI), has left countless first home buyers stuck renting for longer than they want.
But from 1 October 2025, the rules have changed. The expanded Home Guarantee Scheme is opening new doors for first home buyers, and it could save you thousands.
What Is the Home Guarantee Scheme?
The Home Guarantee Scheme is a government initiative designed to help Australians purchase their first home sooner. Normally, lenders require you to have a 20 percent deposit to avoid paying LMI. LMI can add tens of thousands of dollars to your loan.
Under the new rules starting October 2025, eligible first home buyers can:
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Purchase with as little as a 5% deposit
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Pay no Lenders’ Mortgage Insurance (LMI)
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Benefit from higher property price caps in major cities (Sydney up to $1.5 million, Melbourne up to $950,000, Brisbane up to $1 million)
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Apply with no income caps and no limit on places available
This means more people than ever can qualify and buy sooner.
Why This Matters for First Home Buyers
For many first home buyers, the cost of LMI has been the single biggest barrier to entering the market. On a $700,000 property, LMI can easily add $25,000 or more to the cost of a loan. Removing this cost could make the difference between waiting years or buying now.
Add to that the higher property price caps, and you have more choice in suburbs and properties. With unlimited places and no income restrictions, this scheme is far more accessible than previous versions.
Finally, A Clear Roadmap To Home Ownership. Download our First Home Buyers roadmap for Free.
How to Make the Most of the Changes
Even with these benefits, buying your first home is still a big decision. The key is planning ahead and making sure you are ready to act. Here are three steps to take now:
1. Understand your borrowing power. Use a borrowing power calculator to see how much you may be able to afford.
2. Get clear on the real costs. Factor in stamp duty, legal fees, and inspections, so you are not caught off guard.
3. Check your eligibility. See if you qualify under the new Home Guarantee Scheme and explore whether you can combine it with other government grants.
Moving Forward With Confidence
The expanded Home Guarantee Scheme is a game changer for first home buyers in 2025. With just a 5% deposit, no LMI, higher property caps, and no income restrictions, the path to home ownership is clearer than ever.
But clarity only comes with preparation. Knowing your numbers, understanding your options, and having expert support can turn confusion into confidence.
That is where the First Home Buyer Roadmap can help. It is a free step-by-step guide to help you plan smarter, reduce stress, and take advantage of schemes like this one.
Or, if you would like to see exactly how the new Home Guarantee Scheme applies to your situation, book a free call with a Glass Financial broker today: Book a Call.
Disclaimer – Glass Financial
The information provided by Glass Financial is intended for general educational purposes only and should not be considered financial, legal, or investment advice. It has been prepared without taking into account your individual objectives, financial circumstances, or needs.
Before making any decisions regarding loans, financial products, or investments, you should carefully consider whether the information is appropriate to your personal situation. We recommend seeking advice from a qualified and licensed professional.
Any references to loan products relate only to those offered by lenders on the Glass Financial panel. Not all brokers have access to all lenders or products.
Glass Financial Pty Ltd (ABN: 27 614 341 525) is committed to providing clear, honest, and transparent lending guidance. While every effort has been made to ensure the accuracy of the information provided, Glass Financial accepts no responsibility for any loss arising from reliance on this information.
