🏠 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.
Read our blog on how to make an offer on a property here
Read our blog is now a good time to buy here
Written by Craig McDonald 26/08/2025
