Published 25 August 2025

If you’ve been dreaming of buying your first home but struggling with the deposit hurdle, there’s some exciting news from the federal government. The Albanese government has announced that the expansion of the Home Guarantee Scheme will now start on 1 October 2025 — three months earlier than originally planned.

This means that from October, all eligible first home buyers across Australia will be able to purchase a home with as little as a 5% deposit — without income or place caps. Property price caps are also being lifted, giving buyers more options in a competitive market.

What’s Changing?

Originally scheduled for January 2026, the expanded First Home Guarantee Scheme will now open on 1 October 2025. The universal guarantee was a key election promise, and this announcement brings it forward by three months.

Key changes include:

• Deposit hurdle lowered: First home buyers can purchase with just a 5% deposit.

• No income or location caps: The scheme will be open to all eligible first home buyers nationwide.

• Higher property price caps: Maximum purchase prices are being lifted across the country. For example:

  • NSW (Sydney & regional centres): $900,000 → $1,500,000

  • QLD (Brisbane & regional centres): $700,000 → $1,000,000

  • SA (Adelaide): $600,000 → $900,000

  • ACT: $750,000 → $1,000,000

  • (Full table available on government release)

With the median home price in Australia now $844,000, a 5% deposit equals $42,200. Under the new scheme, a buyer in Brisbane could purchase a $1 million home with a $50,000 deposit, saving up to $42,000 in mortgage insurance and cutting up to 10 years off the time it takes to save a deposit.

Why This Matters for First Home Buyers

For years, first home buyers have been locked out of the market while rents keep rising. The expanded scheme is designed to change that:

• Save years of deposit saving time – You won’t need to aim for the 20% “traditional” deposit.

• Avoid lenders mortgage insurance (LMI) – The guarantee acts as security, saving thousands upfront.

• Buy sooner, not later – Get into your own home and start building equity, rather than paying rent.

Since 2022, over 180,000 first home buyers have already been supported through government guarantees. The October expansion means thousands more will have the same opportunity.

Other Housing Reforms to Watch

The announcement also comes alongside broader housing reforms, including:

• A four-year pause to the National Construction Code (to ease regulatory costs).

• Faster housing approvals with the help of AI to clear a backlog of 26,000 homes.

• More lenders being added to the scheme for greater choice.

What Should You Do Now?

If you’re planning to buy your first home in the next 12 months, now is the time to prepare:

1. Review your savings position – Even a 5% deposit is a big step, so start getting your finances in order.

2. Check your borrowing capacity – How much can you borrow, and what property price range can you realistically aim for?

3. Get pre-approval ready – Come October, demand will be high. Having your finance sorted puts you ahead of the competition.

4. Work with a broker – We’ll guide you through the scheme, lender options, and the fine print.

Final Word

This is a landmark change for first home buyers. By bringing the start date forward, the government is making it possible for more Australians to achieve the dream of home ownership sooner.

Any advice contained in this article is of a general nature only and does not take into account the objectives, financial situation or needs of any particular person. Before making any decision, you should consider the appropriateness of the advice with regard to those matters. Information in this article is correct as of the date of publication (25 August 2025) and is subject to change.