Buying your first home has always felt like a huge milestone, but for many Australians, it has also felt out of reach. Saving a 20 percent deposit while paying rent is no easy task. On top of that, the extra cost of Lenders’ Mortgage Insurance (LMI) has been another major barrier, often adding tens of thousands of dollars to the overall loan.
That is why the government’s announcement of the expanded Home Guarantee Scheme, effective from 1 October 2025, is such a game changer for first home buyers. With as little as a 5 percent deposit and no LMI, it is now possible to enter the property market sooner and with less financial stress. Higher property price caps, no income caps, and unlimited places mean this scheme is more accessible than ever before.
Naturally, big changes bring big questions. How much can you save? Who is eligible? Can you combine the scheme with other grants? To make things clearer, we have answered some of the most common questions first home buyers are asking right now.
-
Who is eligible for the new Home Guarantee Scheme?
From 1 October 2025, the expanded scheme is open to eligible first home buyers across Australia. There are no income caps and no limit on the number of places available. You still need to meet standard lending criteria with your chosen lender. -
How much deposit do I need?
You can purchase with as little as a 5% deposit under the new rules. The government guarantee acts as a substitute for part of the deposit, meaning you do not need to save the traditional 20% to avoid paying LMI. -
How much could I save by avoiding LMI?
Lenders’ Mortgage Insurance (LMI) often adds tens of thousands of dollars to the cost of buying. On a $700,000 property, it can easily exceed $25,000. With the government guarantee removing this cost, first home buyers can save significantly. -
Are there property price caps?
Yes. Under the expanded scheme, property price caps are higher in major cities: up to $1.5 million in Sydney, $950,000 in Melbourne, and $1 million in Brisbane. Regional caps vary, so it is important to check what applies to your area. -
Can I combine the Home Guarantee Scheme with other first home buyer grants?
In many cases, yes. You may be able to combine the scheme with state or federal first home buyer grants and stamp duty concessions. This could further reduce your upfront costs. A broker can help you understand what you qualify for. -
How do I apply?
Applications are made through lenders that participate in the scheme. Glass Financial works with more than 80 lenders and can guide you through the process to see which options are best for your situation.
Want to see how the new scheme applies to you?
Download the free First Home Buyer Roadmap to plan your journey.
Or speak with a Glass Financial broker today.
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.
