First Home Guarantee Scheme - 2025

Changes to the First Home Guarantee Scheme

The Prime Minister has recently announced major updates to the First Home Guarantee scheme. Originally scheduled to begin in early 2026, the revised program will now commence in October 2025.

To broaden access and support more Australians into the property market, the scheme has been updated with the following key changes:

• No Income Limits – Previous income restrictions for applicants have been removed.

• No Annual Cap – The limit on the number of home loan guarantees available each year has been abolished.

• Flexible Price Caps – Property price caps will now vary by state, with the maximum for NSW set at $1.5 million.

• 5% Deposit – Applicants will still be required to provide a minimum deposit of 5%.

These changes are intended to make the scheme more inclusive and accessible for a wider range of first-home buyers.

About the Scheme

It’s important to note that the First Home Guarantee is not a grant or concession. Instead, it is a support program in which Housing Australia provides a guarantee to the applicant’s lender. The purpose is to replace lenders’ mortgage insurance (LMI), potentially saving buyers a significant amount in upfront costs.

If an applicant defaults on their loan and the sale of the property does not cover the outstanding balance, Housing Australia will pay the lender the shortfall, up to the pre-agreed limit set during the application process.