First Home Guarantee Changes Oct 2025

Big News for First Home Buyers: Major Changes to the Home Guarantee Scheme Starting October 1

If you’re a first home buyer, or guiding one, there’s a seismic shift happening in the property finance space you need to know about.

As of October 1, 2025, the Federal Government’s First Home Guarantee scheme is undergoing its most significant overhaul to date. For some, it’s a game-changing opportunity.

For others, it’s a mixed bag. Here’s what’s changing, who it benefits, and what you need to think about strategically.

What’s Changing?

1. No More Caps on Places
Previously limited to a select number of applicants per year, the scheme will now be open to all eligible first home buyers with a 5% deposit. That’s a major accessibility boost.

2. No Income Limits
Income thresholds have been removed. Whether you earn $80,000 or $280,000 if you’ve saved a 5% deposit, you’re in.

3. LMI Waived
Under the scheme, you won’t need to pay Lenders Mortgage Insurance (LMI). That’s a potential saving of upto $40,000+ depending on your loan size and lender.

4. Property Price Caps Lifted
New price caps allow buyers to purchase more realistically in capital cities and major regional hubs:

Location	Old Cap	New Cap (from 1 Oct)
Sydney	$900,000	$1.5 million
Melbourne	$800,000	$950,000
Brisbane	$700,000	$1 million
Perth	$600,000	$850,000

5. Early Launch
The rollout has been fast tracked to begin 1 October 2025.

Who Does It Help?

This expanded scheme is ideal for:

First home buyers with a 5% deposit but limited upfront savings

Self-employed or high income earners previously excluded due to income caps

Buyers in high growth metro markets priced out under old thresholds

Time poor professionals who want to move quickly without saving 20%+

In short, it unlocks the market for those who are financially ready, but structurally restricted.

What You Need to Be Aware Of

Increased Demand = Price Pressure
Experts are warning of price rises between 3.5% and 9.9%, especially in major cities. A buyer saving $30K in LMI might pay $50K–$80K more on the purchase price due to market shifts.

5% Equity = Limited Buffer
Buying with a 5% deposit means you’re highly leveraged from Day 1. If rates rise or property values dip, you could be exposed. That’s where structure and strategy matter most.

While the changes open doors, they also come with risks and unintended consequences, especially in an already tight housing market.

Park Road Finance Perspective

At Park Road Finance, we don’t just chase approvals—we design lending strategies that protect your future.

If you’re considering the First Home Guarantee, ask yourself:

Is this property the right long-term fit or just what I can afford today?
Am I confident this loan structure supports my broader financial goals?
Do I have a plan for rate rises, future equity release, or refinancing?

This scheme can be a smart play but only if it’s paired with the right advice and clear-eyed planning.

Let’s Talk Strategy

As always, I’m here to help you cut through the noise and build a lending structure that fits your goals—not just the current headlines.

📞 Book a 15-minute strategy call
Let’s assess whether the First Home Guarantee is the right move for you, and how to get it done with confidence.

Because buying your first home should feel like a step forward, not a risk you don’t fully understand.

Robert Sestan
Founder & Strategic Lending Advisor
Park Road Finance
“We turn complexity into clarity so you can move forward with confidence.”

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