5% deposit scheme for first home buyers will expand early: Here’s what that means for you
More first home buyers can now get onto the property ladder sooner.
In some good news for first home buyers, the Labor government has announced it's bringing forward its changes to the First Home Guarantee.
In case you missed it, it was announced in the budget earlier this year that the scheme would be opening up to all first home buyers regardless of income.
The expanded scheme will now begin on 1 October, 3 months earlier than was originally announced.
Currently, there are income caps associated with the scheme as well as property price caps. But now any first home buyer regardless of income can benefit from the scheme.
The property price caps will remain in place, but these have been increased.
There are also caps on the number of participants who could benefit each year, but these are being scrapped too.
What's the First Home Guarantee?
The First Home Guarantee is a federal government scheme which allows first home buyers to buy property with a 5% deposit and without paying lender's mortgage insurance (LMI).
The government, through Housing Australia, provides the additional 15% of the property price as a guarantee. This means buyers won't need to pay LMI.
The scheme is open for buyers and builders, but you need to plan on living in the home. You can't use the scheme for an investment property.
Interested borrowers will need to apply through a specific panel of participating lenders. You can see the full info on our guide here.
Here are the updated property price caps:
| Location | Current Property Price Cap | Property Price Cap effective 1 October 2025 |
|---|---|---|
| NSW – capital city and regional centre | $900,000 | $1,500,000 |
| NSW – other | $750,000 | $800,000 |
| VIC – capital city and regional centre | $800,000 | $950,000 |
| VIC – other | $650,000 | $650,000 |
| QLD – capital city and regional centre | $700,000 | $1,000,000 |
| QLD – other | $550,000 | $700,000 |
| WA – capital city | $600,000 | $850,000 |
| WA – other | $450,000 | $600,000 |
| SA – capital city | $600,000 | $900,000 |
| SA – other | $450,000 | $500,000 |
| TAS – capital city | $600,000 | $700,000 |
| TAS – other | $450,000 | $550,000 |
| ACT | $750,000 | $1,000,000 |
| NT | $600,000 | $600,000 |
| Jervis Bay Territory and Norfolk Island | $550,000 | $550,000 |
| Christmas Island and Cocos (Keeling) Islands | $400,000 | $400,000 |
You can still apply for the scheme before 1 October, as long as you meet the income caps and current property price caps.
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