Changes to the First Home Guarantee Scheme

The Australian Federal Government confirmed that major changes to the First Home Guarantee will take effect from the 1st October 2025. The Scheme will now be called the Australian Government 5% Deposit Scheme.

The number of eligible buyers are set to rise with an unlimited number of places available, no income caps, higher property price caps and as little as a 5% deposit required without LMI.

What’s changing?

• No Income Caps: The previous income limits for singles and couples will be removed.
• Unlimited Spots: There will be an unlimited number of places available for eligible buyers.
• Deposit as Low as 5%: First home buyers can purchase a property with a 5% deposit.
• Higher Property Price Caps: Property price caps will also be increased.
• No Lender’s Mortgage Insurance (LMI): The government acts as a guarantor for the home loan, eliminating the need to pay LMI.
• Stack your savings with NSW support: In addition to the 5% Deposit Scheme, some buyers may qualify for stamp duty relief under NSW programs.

How can First Home Buyers prepare?

Research

• Check your eligibility with the 5% Deposit Scheme Eligibility Tool here.
• Research your areas property price caps under the new rules.
• Attend our upcoming First Home Buyers Information Evening on the 22^nd October. More details below.

Strengthen Finances

• Save a minimum 5% deposit
• Maintain a good savings history and review credit history
• Check which lenders will be participating in the scheme.

Seek Pre-Approval

• Speak with a Mortgage Broker to understand your financial position
• Approach participating lenders or your Mortgage Broker to seek pre- approval.

Property Search

• Speaking to a McGrath Agent will help to simplify the process, stay ahead of the curve and help you to understand what is available in the current market that meets your needs.