Home Guarantee Scheme: What first home buyers need to know
More Australian first home buyers can now access government support to enter the property market, with major updates to the Home Guarantee Scheme expanding eligibility and lifting limits.
The scheme, first launched in 2020, allows eligible first home buyers to purchase a property with a deposit as low as 5% without having to pay Lenders Mortgage Insurance (LMI). The Federal Government acts as guarantor for the remaining portion of the deposit (usually 20%), helping buyers get into the market sooner.
What’s Changed
From 1 October, the government removed income caps and lifted property value thresholds across the country. The scheme is now open to all eligible owner-occupiers who have not owned property in the past 10 years, rather than only first-home buyers.
Previously, strict caps limited the number of buyers who could access the scheme. With these changes, more Australians, including single parents, regional buyers and returning homeowners, may now be able to take advantage of the program.
The Benefits
- Smaller deposit required – Buyers may be able to secure a property with as little as 5%, a major help in a market where saving a 20% deposit can take years.
- No LMI costs – Avoiding lenders’ mortgage insurance can save buyers tens of thousands of dollars.
- Faster entry into the market – Buyers can move sooner instead of waiting to build a larger deposit.
The Considerations
While the scheme can open doors, it is important to understand the full financial impact.
A smaller deposit usually means a larger loan, which can lead to:
- Higher monthly repayments
- More interest paid over time
- Greater sensitivity to future interest rate changes
Buyers should factor in these ongoing costs and ensure they have the income stability to manage repayments comfortably.
The Takeaway
The Home Guarantee Scheme can be a valuable opportunity for Australians looking to buy their first home or re-enter the market, but it is not a one-size-fits-all solution. With the right advice and strategy, it can be a powerful stepping stone toward home ownership.
At The Property Baron, we help buyers navigate every stage, from eligibility checks to property selection and negotiation, ensuring you secure the right property at the right price. Whether you’re buying in Brisbane, Gold Coast, the Sunshine Coast or beyond, expert guidance can make all the difference.
Need help identifying the right opportunity? Explore our property investment service.