Understanding The Home Guarantee Scheme from October 1st 2025
- Jonathon Rhydderch
- Sep 22
- 3 min read
The Home Guarantee Scheme is set to launch in Australia on October 1st, 2025, and it promises to change the game for many aspiring homeowners. This initiative aims to make homeownership more attainable, especially for first-time buyers and those trying to enter the property market.
What is the Home Guarantee Scheme?
The Home Guarantee Scheme is a government initiative designed to help eligible Australians purchase their first home. The government offers a guarantee for a portion of the home loan, allowing buyers to secure a mortgage with a lower deposit. This is particularly beneficial for those who may find it hard to save a significant amount, which is often a major hurdle to homeownership.
This scheme is expected to cover various types of properties, including new builds and existing homes. By reducing the deposit requirement from the typical 20% to as low as 5%, the Home Guarantee Scheme hopes to assist more Australians in realizing their dream of owning a home.
Key Features of the Home Guarantee Scheme
Lower Deposit Requirements
One of the most significant benefits of the Home Guarantee Scheme is the reduced deposit requirement. Usually, lenders require a deposit of at least 20% of the property's value to avoid paying Lenders Mortgage Insurance (LMI). However, under this scheme, eligible buyers could secure a home loan with just a 5% deposit. This step can open doors for thousands more Australians who may have struggled to gather the necessary funds.
Government Backing
The government's guarantee means lenders can offer loans to buyers with a smaller deposit while reducing lending risk. This backing often leads to more competitive interest rates, which can save buyers substantial amounts over the life of their loan.
Eligibility Criteria
To qualify for the Home Guarantee Scheme, applicants must meet specific eligibility criteria. It is crucial for potential buyers to understand these requirements so they can determine their eligibility before applying.
What’s changing from 1 October 2025?
No place limits: all Australian first home buyers who have saved a 5% deposit can apply.
No income caps: first home buyers with higher incomes can access the Scheme.
Higher property price caps: to help home buyers where property prices have increased.
Simpler access in regional areas: Regional First Home Buyer Guarantee will be replaced by the First Home Guarantee.
The Home Guarantee Scheme is available through over 30 Participating Lenders across Australia, including a wide range of customer-owned and regional banks, as well as major banks. Housing Australia will continue to work with lenders to increase access to the Scheme.
Property price caps from 1 October 2025
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 |
TAS – capital city | $600,000 | $700,000 |
TAS – other | $450,000 | $550,000 |
ACT | $750,000 | $1,000,000 |
NT | $600,000 | $600,000 |
Jervis Bay Territory and Norfolk Island | $550,000 | $550,000 |
Christmas Island and Cocos (Keeling) Islands | $400,000 | $400,000 |
Book and appointment with the Castell Finance Team for more information.
