First Home Guarantee Scheme: Become a Homeowner with a 5% Deposit

The first home guarantee scheme is now set to make homeownership more accessible than ever in Australia, with the Albanese Government accelerating its debut to 1 October 2025. Under the expanded home guarantee scheme, eligible first-home buyers will be able to purchase a property with just a 5 percent deposit, backed by a government guarantee – and without the usual burden of Lenders Mortgage Insurance (LMI).

What’s Changing in the First Home Guarantee Scheme?

From October, the first home buyer guarantee scheme delivers several landmark updates:

What This Means for Buyers Across Australia

These changes in the first home guarantee scheme could significantly lower the time and money required to buy a first home. This means:

• The national median home price of around $844,000 would require just a $42,200 deposit, compared with the usual $168,800 for a 20% deposit.
• For Sydney, under the new cap of $1.5 million, a 5% deposit equals $75,000, making upper-range properties more accessible.
• For regional buyers, increased caps expand options previously out of reach, while broader eligibility simplifies access.

A note of caution, however. Sure, removing income and participation limits for the first home guarantee scheme may widen access, but this also risks skewing benefits toward higher-income buyers who don’t need the help. This may foster greater competition for slots without addressing underlying supply constraints.

Spotlight on Brisbane’s First-Home Buyers

Under the updated first home guarantee scheme, Brisbane buyers now have access to properties up to $1 million. This is up from the old cap of $700,000.

• For example,  a first-home buyer in Brisbane can now purchase a $1 million home with only a $50,000 deposit. This potentially saves about $42,000 in LMI and years of saving time.
• With the 2025 Olympic build-up, growth corridors and suburban investment are rising. The scheme makes this opportunity more accessible to locals looking for value.
• Working with participating lenders, savvy brokers and a knowledgeable conveyancer, you can expect a smoother process – from navigating price caps to securing approval.

Benefits, Considerations and Things to Keep in Mind

• Smaller deposits mean home ownership can happen sooner, freeing up the budget from rent to mortgage.
• Eliminating LMI saves tens of thousands of dollars, depending on the price bracket.
• No income or place caps widen access to a broader segment of buyers.

While the updated first home guarantee scheme opens the door to homeownership sooner and with far less financial pressure, it’s important to understand both the advantages and the fine print. The changes in the first home buyer guarantee brings clear benefits across Australia, such as:

You should also note, however that there are some considerations to be made, such as:

Ready to Buy with the First Home Guarantee Scheme?

So, are you ready to become a homeowner with this new and updated version of the scheme? Here are a few things you should start doing before its launch this October 2025:

Start saving towards that 5% deposit and aim to consolidate your finances.

Even with a reduced deposit requirement, you’ll still need to show consistent savings habits and demonstrate that you can manage your money responsibly. Focus on building up that 5% deposit, reduce unnecessary expenses and work on paying down any high-interest debts to strengthen your borrowing position.

Check your first home guarantee scheme eligibility via Housing Australia or with a licensed participating lender.

While income and participation caps are being lifted, you’ll still need to meet basic conditions, such as being an Australian citizen or permanent resident, planning to live in the property and borrowing through an approved lender. Checking early can give you peace of mind and help you avoid surprises later.

Engage a mortgage broker early so they can help verify eligibility and match you with suitable lenders.

Mortgage brokers have a broad view of the market and can guide you through lender requirements, interest rate options and application processes. By involving a home loan broker early, you’ll have a clearer idea of your borrowing capacity and what type of loan best suits your circumstances.

Consult a trusted conveyancing professional to ensure contracts, settlement and ownership transfer are handled smoothly.

Buying a home involves legal and contractual complexities that can feel overwhelming for first-time buyers. A conveyancer or solicitor can review contracts, check property titles and ensure you’re meeting your legal obligations so that settlement runs without unnecessary delays or risks.

Monitor Brisbane’s property landscape, identify affordable suburbs within the $1 million cap and stay informed on market shifts.

The Brisbane market is dynamic, especially with growth driven by population movement and infrastructure development ahead of the 2032 Olympics. Keeping track of price trends, new developments and suburbs offering value under the $1 million cap will help you act quickly when the first home guarantee scheme begins.

Are You Ready to Become a Homeowner with the First Home Guarantee Scheme?

The first home guarantee scheme represents a rare – and real – step toward improving affordability and accessibility across Australia. For many, especially in growing markets like Brisbane, it’s a chance to become a homeowner with a significantly lower deposit and without LMI. It’s not a silver bullet, but it’s a bold move toward unlocking opportunity.

When you’re ready, preparing your finances, aligning with the right professionals and acting with clarity can position you to take advantage of this opportunity – so you’re not just dreaming of homeownership, but actively moving toward it.