From October 1, 2025, Australia’s property landscape has shifted again — and this time, first-home buyers are front and centre. The federal government’s newly expanded 5 % Deposit Scheme (previously the Home Guarantee Scheme) has officially launched, promising easier access to home ownership but also sparking debate about its wider impact on prices and affordability.
If you’ve been saving for your first property, this could be the opportunity you’ve been waiting for.
The scheme helps eligible buyers purchase their first home with a deposit as low as 5%, while avoiding the usual requirement for Lenders Mortgage Insurance (LMI).
Here’s how it works:
The government guarantees part of the loan (up to 15%), so you can enter with a 5% deposit.
For single parents or legal guardians, the minimum deposit dips to 2% under the single-parent stream.
The scheme is delivered through participating lenders across Australia.
This guarantee allows more buyers to enter the market years earlier — without having to wait until they can save a full 20% deposit.
The suite of changes from 1 October 2025 significantly broadens access:
Unlimited places – The annual cap on scheme places has been removed.
No income caps – Previously there were income thresholds (e.g., $125k for singles, $200k for couples); now these are gone.
Higher property price caps – For example: NSW (capital city & regional centre) cap rises from ~$900,000 to ~$1.5 million.
Still no LMI for eligible buyers – Because the government acts as guarantor, avoiding LMI is a major benefit.
Since inception (2020) the scheme has supported 240,000+ Australians and in 2024-25 the scheme supported over 1 in 3 first-home buyers nationally.
These changes recognise the realities of today’s housing market — especially in higher-price areas such as Sydney, Melbourne and Brisbane — where saving a large deposit has been a major barrier.
Saving a 20% deposit in many markets can take 5-10 years (or more). Under this scheme, some first-home buyers may be able to buy after just a 2-3 year saving period. For example, the government pointed out that with a median home price of ~$844,000, a 5% deposit is ~$42,200 — an amount that used to only cover 20% many years ago.
Because eligible buyers avoid LMI, they could save $15,000–$41,000 depending on property price. (“A $500k property: save ~$15,000; $1M property: save ~$41,000.”)
With increased price caps — e.g., Brisbane up to $1 million, Perth up to $850k, Adelaide up to $900k — buyers have more suburbs and more homes in their reach.
Entering the market sooner means you begin building equity earlier, which is a valuable step in your long-term financial journey. With over 240,000 participants so far, the scheme is already creating pathways to ownership.
According to the 2025 First Home Buyer Report, first-home buyers are still actively buying, despite high prices — each quarter there are ~28,000 new first-home buyer loans, with more than 253,000 loans issued since March 2023.
If you’re considering buying your first home, here’s your practical checklist:
Check your eligibility – Visit firsthomebuyers.gov.au and use their postcode-tool to check applicable price cap for your region.
Start saving your 5% deposit – Even though it’s lower, you will still need to save some deposit plus the extra costs (e.g., stamp duty, legal fees).
Speak with a participating lender or broker early – Get pre-approval, understand serviceability and what the lender will require.
Choose property within your region’s new cap – Avoid assuming “just because the cap is $1.5 m I should borrow that much”. Choose something sound.
Budget for all ongoing costs – Mortgage repayments, rates, insurance, maintenance, and possible interest-rate increases should all be factored in.
Apply via your lender – Once pre-approved and eligible, your lender will submit to the scheme. Good lenders/providers are already gearing up.
In high-value markets like Sydney, where median house values exceed $1 million, the expanded price cap of $1.5 million means many buyers who were previously locked out may now qualify.
This opens up opportunity — yet also requires savvy. With more buyers now eligible, competition for well-priced homes may increase, so acting with strategy is important.
The 5% Deposit Scheme is one of the most significant first-home buyer supports in recent years — offering real pathways into the property market for many Australians.
It’s not just about affordability; it’s about accessibility. By removing income limits, lifting price caps, and offering unlimited places, the government has opened new doors.
If you’re thinking about buying your first home, now is the time to explore your options, talk to your lender and get ready — you could be moving into your own home sooner than you think.
For many, the key question isn’t “Can I buy?” — it’s “How smartly can I buy?”
Need guidance?
Our team at Richardson & Wrench is ready to help you understand the process, connect you with trusted lenders, and find a property that fits the new scheme.
Contact us now and let's get you moving 👉Click to contact
For official eligibility details and participating lenders, visit FirstHomeBuyers.gov.au.
Information has been collated from the following sources:
https://www.abc.net.au/news/2025-10-01/first-home-buyer-scheme-house-prices-rise/
https://www.corelogic.com.au/news-research
https://cdn.finder.com.au/finder-au/wp-uploads/2025/06/Finder-First-Home-Buyer-Report-2025.pdf
https://www.money.com.au/media/first-home-buyer-mortgage-insights-report-2025
https://zammitrealestate.com.au/5-percent-deposit-scheme-october-2025-first-home-buyer-guide