Buying your first home is a dream come true. But for many Aussies, especially young families, solo parents, and everyday workers, that dream can feel like it’s always just out of reach. Enter the “First-Home Buyer Scheme” — Australia’s government-backed initiative aimed at making homeownership more accessible. And now, there’s big news: the expansion of this scheme has been brought forward to 1 October 2025, three months earlier than originally planned.
Let’s break it all down in plain English, whether you’re just starting to think about buying a home or advising clients in the housing, banking, or real estate industries.
First-Home Buyer Scheme Expansion Brought Forward in Australia
| Feature | Details |
|---|---|
| Launch Date | 1 October 2025 (Previously Jan 2026) |
| Participant Cap | Removed — Unlimited spots available |
| Income Limits | Removed — More people now eligible |
| Deposit Requirement | 5% (no Lenders Mortgage Insurance needed) |
| New Price Caps | Sydney: $1.5M, Melbourne: $950K, Brisbane: $1M, other regions increased proportionally |
| Estimated Uptake | 20,000+ new participants in Year 1 |
| Official Site | housingaustralia.gov.au |
The First-Home Buyer Scheme expansion is a game-changing opportunity for Aussies ready to jump into the housing market. With no income caps, higher price thresholds, and unlimited participation, it’s more inclusive and impactful than ever. But with increased demand, potential price surges, and market competition, timing and strategy will be key.
Whether you’re a young couple, a solo saver, or a pro helping others buy their first home, October 2025 could be your launchpad.
For hopeful homebuyers, this could be the leg-up you need. For professionals, now’s the time to gear up, educate clients, and make the most of this massive policy shift.
What Is the First-Home Buyer Scheme?
In a nutshell, the First Home Guarantee (part of the broader Housing Australia schemes) helps first-time buyers purchase a property with just a 5% deposit — without paying Lenders Mortgage Insurance (LMI). Normally, if you put down less than 20%, lenders hit you with expensive insurance premiums. But under this scheme, the federal government acts as a guarantor, helping cover the gap.
It’s been around since 2020, but this new expansion means more people can qualify, buy sooner, and borrow more.
Fun Fact: According to ABS, the average deposit for a first home in Australia is nearly $120,000. This scheme can slash that to under $30,000 for many buyers.
Why Was the Launch Moved to October?
Prime Minister Anthony Albanese said the move is about “making the Australian dream of homeownership possible again.”
With rising rents, stubborn inflation, and a tight housing market, many Aussies feel like they’re being priced out. The October launch aims to:
- Give buyers a leg-up before the spring property season.
- Cut years off the time it takes to save a deposit.
- Help lower-to-middle income earners get on the property ladder now, not later.
Expert Insight: According to CoreLogic, median house prices in major cities have jumped over 30% in the past three years. Time really is money in this market.
What’s Changing (And What Isn’t)
No More Income Cap
In the past, only singles earning up to $125,000 or couples earning up to $200,000 qualified. From October 2025, those limits are gone.
Tip: This opens doors for higher-earning professionals, small business owners, and dual-income households who were previously excluded.
No Cap on Participants
Before, the scheme had a limited number of spots each year (like concert tickets that sold out fast). Now, it’s uncapped — every eligible buyer can apply.
Higher Property Price Limits
As house prices rise, the cap for eligible homes has also gone up. For example:
- Sydney: from $900,000 → $1.5 million
- Melbourne: from $800,000 → $950,000
- Brisbane: from $700,000 → $1 million
This means buyers can now use the scheme even in competitive urban markets.
5% Deposit, No LMI
That part stays the same. And it’s a huge win, considering LMI can cost upwards of $30,000 on a $700K home.
Comparison Table
| Feature | Before October 2025 | After October 1, 2025 |
| Eligibility | Capped at 50,000 places per year. | Unlimited places—open to all eligible first-home buyers. |
| Income Limits | $125,000 for individuals; $200,000 for couples. | No income caps. |
| Property Price Caps | Varied by state/region (e.g., Sydney: $900,000). | Increased to align with market values (e.g., Sydney: $1.5 million). |
| Lenders Mortgage Insurance | Government guarantees up to 15% of the property value, waiving LMI. | Government guarantees up to 15% of the property value, waiving LMI. |
Real Talk: Will It Push Up Prices?
That’s the million-dollar question. Some experts say: yeah, maybe.
According to Lateral Economics, the scheme could raise home prices by up to 9.9%, or around $90,000 in some markets.
Former RBA economist Martin Eftimoski warned that launching the scheme before the spring season could be like adding “petrol on a fire“.
But others argue it helps balance things out. Property Council Australia and REIA say that if paired with more housing supply, it’s a practical move.
Bottom line? Great for buyers. But the government needs to speed up construction approvals and build more homes too.
Real Life Example: Sarah’s Journey to Homeownership
Sarah, a 29-year-old nurse from Brisbane, had been saving for over 6 years. Even with a solid income, she found the 20% deposit goal daunting. But with the First-Home Buyer Scheme, she was able to buy a $650,000 unit with a 5% deposit of just $32,500.
“This scheme cut two years off my savings plan and helped me move out of renting. It’s made a massive difference,” Sarah says.
Lesson: This isn’t just about dollars and cents. It’s about real people finally getting a place to call home.
Should You Apply?
If you:
- Are a first-time buyer (never owned property in Australia),
- Can come up with a 5% deposit,
- Plan to live in the property, and
- Meet basic loan serviceability rules…
Then YES, this scheme could be a game-changer for you.
Tip for professionals: Mortgage brokers, realtors, and financial advisors should prep now to support clients as demand spikes.
How to Apply (Step-by-Step)
Step 1: Check Eligibility
Go to the official Housing Australia site and use their eligibility tool.
Step 2: Get Pre-Approval
Work with a participating lender (like Commonwealth Bank, NAB, or other major players).
Step 3: Find a Property
Ensure it falls within the updated price cap for your area.
Step 4: Finalize and Settle
Once approved, your lender applies for the guarantee on your behalf. No need to apply separately.
Reminder: You still need to repay your loan. The guarantee helps with the deposit, not the mortgage itself.
Top 3 Mistakes to Avoid When Using the First-Home Buyer Scheme
- Myth: “I still need a 20% deposit.” Fact: This is the core of the scheme! You only need a 5% deposit. By leveraging the government guarantee, you can avoid the costly LMI and get into the market sooner.
- Mistake: Not checking the new property price caps. The caps have changed, and you might now be eligible for properties you previously couldn’t afford. Use the official Housing Australia website’s eligibility tools to see what you can buy.
- Mistake: Applying with any lender. The scheme is only available through a list of “Participating Lenders.” Check the official Housing Australia website for the full list of banks and credit unions that offer this benefit.
FAQs
Can investors use this scheme?
No. It’s for owner-occupiers only.
Do I have to be an Australian citizen?
Yes. Permanent residents are not eligible at this time.
Can I use it to build a new home?
Yes! You can buy an existing home, new build, house-and-land package, or off-the-plan property.
Is there a deadline to apply?
Not anymore! The scheme is uncapped, but we recommend applying early.
Are there any hidden fees?
Nope. But always read the fine print of your mortgage agreement and consult with your lender.
Can I apply with my partner?
Yes, but both of you must be first-home buyers and meet the citizenship and deposit requirements.
