Big Changes for First Home Buyers from 1 October 2025: What You Need to Know
For many Australians, the dream of buying a first home has felt out of reach. Saving a 20% deposit, keeping up with rising house prices, and navigating strict eligibility rules has been overwhelming.
But from 1 October 2025, the Government’s Home Guarantee Scheme is changing — and these changes could make owning your first home closer than you think.
In this post, we’ll break down:
What the Home Guarantee Scheme is.
The key changes coming into effect on 1 October 2025.
The new property price caps across major cities and regions.
What these changes actually mean for first home buyers.
How a mortgage broker can help you take advantage of the new rules.
What is the Home Guarantee Scheme?
The Home Guarantee Scheme is an Australian Government initiative designed to help eligible first home buyers enter the property market sooner. Under the scheme, you can buy a home with as little as a 5% deposit without paying Lenders Mortgage Insurance (LMI).
Normally, LMI can add $20,000–$60,000 in extra costs when buying a home with less than a 20% deposit. The Scheme allows the Government to act as a guarantor on part of your loan, saving you that cost and helping you buy faster.
What’s Changing from 1 October 2025?
The updates coming into effect on 1 October 2025 are some of the biggest improvements we’ve seen to the Home Guarantee Scheme:
Unlimited places available — no more waiting lists. Any eligible first home buyer with a 5% deposit can apply.
Income caps removed — higher income earners can now qualify.
Property price caps increasing — more properties in more suburbs are now eligible.
Regional access simplified — fewer rules, more opportunities outside capital cities.
New Property Price Caps (from 1 October 2025)
One of the biggest changes is the increase in property price caps, making a much wider range of homes eligible under the Scheme.
Sydney (capital & regional centres): Was $900,000 → Now $1,500,000
Melbourne: Was $800,000 → Now $950,000
Brisbane: Was $700,000 → Now $1,000,000
Perth: Was $600,000 → Now $800,000
Adelaide: Was $600,000 → Now $750,000
Hobart: Was $600,000 → Now $750,000
Regional areas (most states): Were $450–$600k → Now $650–$750k
What This Means for First Home Buyers
These changes make a real, tangible difference for Australians trying to enter the property market.
✅ Save on costs — with just a 5% deposit, you can avoid paying tens of thousands in LMI.
✅ Buy sooner — no need to wait years to save a 20% deposit.
✅ More choice — higher property caps mean more homes, in more suburbs, are now within reach.
✅ Access regional markets more easily — great news if you’re looking to buy outside of the major capitals.
How a Mortgage Broker Can Help
Buying your first home is exciting — but it’s also one of the biggest financial decisions you’ll ever make. The new rules make the process easier, but every buyer’s situation is unique.
As mortgage brokers, we help you:
Understand exactly how much you can borrow.
Compare lenders and find the right loan structure for you.
Work out if you’re eligible under the new Home Guarantee Scheme.
Navigate the buying process with confidence.
At Zion Financial, we work with first home buyers every day to turn the dream of owning a home into a reality. With the 1 October changes, now is the perfect time to review your options.
Ready to Explore Your First Home Buying Options?
The changes to the Home Guarantee Scheme could be the opportunity you’ve been waiting for. With higher property caps, no income limits, and the chance to buy with just a 5% deposit, your dream home might be closer than you think.
Book a Discovery Call with our mortgage broking team today. We’ll guide you through the process and help you take the first step towards owning your home.
Disclaimer
The information provided in this article is general in nature and does not take into account your personal objectives, financial situation, or needs. Before making any decisions, please seek personalised advice. Eligibility criteria apply for the Home Guarantee Scheme.
