🏠 5% Deposit Scheme Expands Early — What It Means for First Home Buyers (and Prices)
The federal government has just fast‑tracked a major change for first home buyers — the Home Guarantee Scheme (HGS) will expand from 1 October 2025, a full year earlier than planned.
From that date, all first home buyers will be able to purchase with just a 5% deposit and skip lenders mortgage insurance (LMI).
It’s a big win for buyers — but it could also mean more competition and higher prices.
What is the Home Guarantee Scheme?
- Allowing purchases with a 5% deposit.
- Waiving LMI (saving buyers $10k–$30k+).
- Using a government guarantee instead of a 20% deposit.
Since 2020, the scheme has helped over 230,000 Australians buy their first home — even in a rising market.
What’s Changing in October 2025?
- No income caps — all first home buyers can apply.
- No place limits — the annual quota is gone.
- Higher property price caps — more suburbs and property types are eligible.
- The Regional First Home Buyer Guarantee will merge into the main scheme.
House Price Cap Changes
| Location | Current Property Price Cap | Property Price Cap effective 1 October 2025 |
|---|---|---|
| NSW – capital city and regional centre | $900,000 | $1,500,000 |
| NSW – other | $750,000 | $800,000 |
| VIC – capital city and regional centre | $800,000 | $950,000 |
| VIC – other | $650,000 | $650,000 |
| QLD – capital city and regional centre | $700,000 | $1,000,000 |
| QLD – other | $550,000 | $700,000 |
| WA – capital city | $600,000 | $850,000 |
| WA – other | $450,000 | $600,000 |
| SA – capital city | $600,000 | $900,000 |
| SA – other | $450,000 | $500,000 |
| ACT | $750,000 | $1,000,000 |
Housing Minister Clare O’Neil says the aim is to “get more Australians into their first home sooner.”
Why Acting Before October Could Pay Off
- Help you buy before potential price rises.
- Still give you the 5% deposit + LMI waiver benefits.
- Reduce competition compared to post‑October.
How CBM Mortgages Can Help
- Check HGS eligibility.
- Compare participating lenders.
- Get pre‑approval so you can act fast.
We’ll also run the numbers so you know exactly what your repayments will be — no surprises.
The Bottom Line
The early expansion of the HGS is great news — but it could also heat up the market. If you’re ready (or close to ready), it might make sense to move sooner rather than later.
📞 Let’s talk — book a free chat with us today and find out if you could be holding the keys to your first home sooner than you think.
Contact CBM Mortgages | Home Loan Pre‑Approval Guide
Disclaimer: This article is general information only and not financial advice. Always consider your own circumstances and seek professional advice before making decisions.
