First Home Guarantee 2025 – A Complete Guide for First Home Buyers

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The First Home Guarantee helps first-time buyers fast-track their property dreams with a smaller deposit, allowing eligible buyers to purchase their first home with the government as the mortgage guarantor, meaning a deposit as low as 5% instead of the usual 20%.

Housing Australia supports the scheme by guaranteeing up to 15% of the property’s value to participating lenders, allowing borrowers to finance up to 95% and avoid costly lender’s mortgage insurance (LMI).

Who can apply? See if you qualify?

• Citizenship/residency: Australian citizen or permanent resident.
• Age: 18 years or older.
• Owner-occupier: Property must be for personal residence. First-time buyer: No property ownership in Australia in the last 10 years.
• Deposit: Minimum 5% of the property value.
  
  

What’s New in the Scheme (from 1 October 2025)

• No income caps: Higher-income first home buyers can now access the Scheme; previous caps were $125,000 (individual) or $200,000 (joint)
• Higher property price caps: Property price caps have increased by an average of $150,000 nationwide, with Sydney up nearly 70%, making higher-priced homes more attainable.
• No place limits: Previously 35,000 places existed; with no cap, more buyers can enter the market sooner.
• Simpler regional access: The Regional First Home Buyer Guarantee will now be replaced by the First Home Guarantee
  
  

Who benefits the most from this change?

• Higher income earners: Previously ineligible individuals or couples can now join the Scheme.
• Higher property price seekers: Buyers wanting more expensive homes due to for example location or finishes are now included.
• Sydneysiders, Brisbanites, Adelaideans: These buyers gain most, with price cap rises of $600k (Sydney) and $300k (Brisbane and Adelaide), well above the $150k nationwide average.
• Regional buyers: Simplified access and removal of the 10,000-place limit make it easier for regional buyers to participate. 
  
  

Changes to Property Price Caps

From these figures, it’s clear that with the new property price caps, more people will be able to enter the house market in their respective capital cities, not just the unit market, potentially making the house market more competitive than before.

With the new caps, the unit market in all major capital cities is included, improving affordability and increasing the capability of first home buyers to enter the market.

Therefore, it is very likely that buyer demand will grow rapidly as a result of these changes.

Reduction in Deposit Saving Time

With the new changes, younger couples will take less time to save for their first home. On average, they could save approximately 3 years in saving time for an entry-level home in Australia.

The biggest reduction is likely in Sydney entry houses, where buyers could save up to 5 years to accumulate a deposit, and around 4 years in Brisbane or Canberra.

For entry-level units, in some areas couples may not need to save for even a year, such as in Darwin, Canberra, and general regional areas, enabling them to enter the property market sooner.

What does this mean for me?

• Better chance to buy: You can access lower-priced homes more easily with the new property price caps.
• More options available: Entry-level houses and units in major cities are now within reach.
• Faster decision-making needed: Popular properties would likely sell much quicker due to higher demand from first home buyers.
• Improved affordability: The scheme makes it easier for you to get into the market with a smaller deposit.

Overall, if you are a first home buyer, particularly in Sydney, this could be a golden opportunity to purchase, as the bar to enter the market has been significantly lowered.

However, this change can also be a double-edged sword for those who are eligible but still saving for a deposit. Eligible buyers should aim to make their first home purchase quickly to avoid being caught in the herd of buyers rushing to take advantage of the change.

How can Propertybuyer help?

• Find the right property: We identify homes that fit your budget, lifestyle, and first home eligibility, including hidden opportunities.
• Maximise government schemes: We guide you through programs like the First Home Guarantee to make your deposit go further.
• Negotiate price and terms: We work to secure the best possible price and conditions, helping you get more value for your money.
• Save time and stress: We handle research, inspections, and paperwork, making the process smoother and faster.
• Access off-market homes: We often know about properties not publicly listed, giving you a competitive edge.
  
  

If you’d like expert help finding, evaluating and negotiating your first property, and having a professional buyers advocate by your side, then reach out for a friendly chat with our team at Propertybuyer today.

  To have one of the friendly Propertybuyer Buyers' Agents  to contact you:

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call us on 1300 655 615 today.