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 has removed income caps and lifted property value thresholds across the country. The scheme is now open to all eligible owner-occupiers who haven’t owned property in the past 10 years, rather than just first-timers.

Previously, there were strict caps on the number of buyers who could access the scheme, limiting its reach. With these changes, more Australians including single parents, regional buyers, and returning homeowners can now take advantage of the program.

The benefits

• Smaller deposit required – Buyers can secure a property with as little as 5%, a major help in a market where saving 20% 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

Canstar’s data insights director Sally Tindall says while the scheme opens doors, it’s important to understand the full financial impact.

A smaller deposit typically means a larger loan, which leads to:

• Higher monthly repayments
• More interest paid over time
• Possible exposure to higher interest rates

Buyers should factor in these ongoing costs and ensure they have the income stability to manage them comfortably.

The takeaway

The Home Guarantee Scheme is a valuable opportunity for Australians eager to buy their first home or re-enter the market, but it’s 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 step, from eligibility checks to property selection and negotiation, ensuring you buy the best property at the best price possible.