From 1 October 2025 the Australian Government is expanding the Home Guarantee Scheme in a way that materially lowers the barrier to entry for first home buyers. Places become unlimited, income caps are removed, and purchase price caps lift across every state and territory.

For Sydney's capital and regional centres, the cap moves from $900,000 to $1.5 million. These settings give more first home buyers a viable path with a 5 per cent deposit while avoiding Lenders Mortgage Insurance through a government guarantee issued by Housing Australia. [1]

Why this matters

Many buyers who sat just outside the rules now qualify. In practice, the Scheme allows eligible buyers to purchase with a 5 per cent deposit while Housing Australia guarantees part of the loan, so lenders can write up to 95 per cent loan-to-value without charging Lenders Mortgage Insurance. You still need to meet a lender's credit criteria, but the upfront cost hurdle drops significantly. [2]

What changes on 1 October

• Unlimited places. No allocation limits, so eligible buyers are not waiting for releases.
• No income caps. Higher earners can access the Scheme from 1 October.
• Higher property price caps. Caps lift nationwide to reflect market conditions. Examples: Sydney $1.5m, Melbourne $950k, Brisbane $1.0m, Perth $850k, Adelaide $900k, ACT $1.0m. Check the full table for your postcode.
• Simpler regional access. The Regional First Home Buyer Guarantee rolls into the First Home Guarantee for a single, cleaner pathway. [1]

An explainer of the Guarantee

The First Home Guarantee is part of the federal Home Guarantee Scheme. It helps eligible buyers who have saved a minimum 5 per cent deposit to purchase a home to live in. Housing Australia provides a Guarantee to a participating lender for up to 15 per cent of the property value under the First Home Guarantee, which is why Lenders Mortgage Insurance is not required.

You apply through a participating lender, not directly with Housing Australia. Off-the-plan apartments, new builds and established dwellings are all eligible, provided they sit under the price cap for the location and you plan to occupy the home.

How this works with NSW assistance

Federal settings stack with NSW programs that reduce state transfer duty and support new builds. Under the First Home Buyers Assistance Scheme, eligible buyers receive a full duty exemption up to $800,000 and a concessional duty rate from $800,000 to $1,000,000, subject to residence and eligibility rules.

The Revenue NSW calculator should be used for exact figures for your contract date and price band. The First Home Owner Grant remains available for new homes up to $600,000 or $750,000 for house-and-land, with residence requirements. [3]

Who stands to benefit most

• Buyers who previously exceeded income thresholds but have strong borrowing capacity and a 5 per cent deposit saved.
• Households targeting suburbs that now sit under the revised caps, particularly in Sydney
• Off-the-plan purchasers who value time to settlement to keep saving while their apartment is delivered.

Common questions, answered

• Is this a cash payment from government? No. It is a guarantee to your lender that sits behind your loan. You still borrow and repay in the usual way.
• Do I avoid stamp duty? That is a state decision. In NSW, duty relief depends on price and eligibility under the First Home Buyers Assistance Scheme. Use the official calculator or speak to your conveyancer. [3]
• Can investors use the Scheme? No. The property must be owner-occupied under the Scheme rules.
• What properties are eligible? New or existing dwellings, including off-the-plan, provided the contract price is at or under the local cap and you meet lender criteria.

A quick scenario

Consider an eligible buyer looking at a $900,000 off-the-plan apartment in a well-connected Sydney location. With a 5 per cent deposit saved, the buyer applies through a participating lender. If approved under the First Home Guarantee, Housing Australia guarantees up to 15 per cent of the value for the lender. The buyer avoids Lenders Mortgage Insurance, keeping upfront costs focused on deposit and standard purchase costs. If the contract price were above $900,000 and under the new $1.5 million cap for Sydney, it could still fit after 1 October, subject to credit approval and Scheme rules.

Your step-by-step next move

1. Check eligibility and caps. Use Housing Australia's tools to understand Scheme rules and the new property price caps by location. [1]
2. Speak with a participating lender. Applications go via lenders on Housing Australia's approved list. They will reserve a place and guide documentation requirements.
3. Shortlist apartments under the cap. Our team can match your budget and timing to specific ALAND releases that qualify.
4. Get pre-approval and hold your place. Your lender handles Scheme pre-approval and home loancredit assessment.
5. Exchange and move to settlement. Your conveyancer manages duty assessments and any NSW concessions or grants you may be eligible for.

A note on timing and market dynamics

The changes take effect on 1 October 2025. Until then, the current rules apply. Housing Australia has signposted that a new eligibility tool and updated lender processes will go live in October, alongside the price-cap table. As with any demand-side support, outcomes will vary by market and supply conditions, so fast, well-prepared applications will matter.

How ALAND can help

Book a 15-minute discovery call with the ALAND Sales Team on 1800 025 263 or request a call-back via our enquiry form.

Important information

This article is general information only. Government programs and thresholds change and lender credit criteria apply. Seek independent financial and legal advice before making decisions. For NSW duty and grant assessments, rely on the official Revenue NSW tools or your adviser. [3]

Sources

[1] Housing Australia media release: unlimited places, higher caps from 1 October 2025, including the full cap table. Housing Australia
[2] First Home Guarantee overview, eligibility, property types and lender pathway. Housing Australia
[3] Revenue NSW: First Home Buyers Assistance Scheme thresholds, residence rules and calculator. Revenue NSW
[4] Revenue NSW: First Home Owner Grant (new home) summary and thresholds. Revenue NSW