What the Home Guarantee Scheme Expansion Means for Buyers

The Home Guarantee Scheme was first implemented on the 1st of January 2020, to help first-home buyers purchase a home sooner. The Scheme has been in operation since 2022. On October 1, 2025, the government made changes and expanded the Scheme’s accessibility.

The expansion of the Home Guarantee Scheme came into effect on the 1st of October, 2025. Now, price caps have increased, income limits have been removed, and a wider range of lenders can offer the scheme. 

So, what does the expansion really mean for first-home buyers? In this article, we will discuss both the benefits and limitations of the expanded Home Guarantee Scheme as of October 2025.

What is the Home Guarantee Scheme?

The Home Guarantee Scheme is a national Government scheme that helps eligible Australians buy their first home. Under this Scheme, first homebuyers can purchase a home using a 5% deposit without paying Lenders Mortgage Insurance (LMI).

Housing Australia plays a significant role in this Scheme. They act as the guarantor, allowing the lender to waive the LMI fee on the loan (which is 95% of the property’s value), as well as stepping in if the mortgage ends up in default.

To be eligible for the Home Guarantee Scheme, first homebuyers must be Australian citizens or permanent residents, 18 years old or older, plan to live in the property, have not owned property or land in Australia in the last 10 years, and have saved a minimum deposit of 5%.

The Home Guarantee Scheme expansion

As of the 1st of October, 2025, the Home Guarantee Scheme has expanded for greater accessibility.

Before the expansion, applicants had to have a taxable income of $125,000 or less for individual applicants and $200,000 for joint applicants; after the expansion, income limits do not apply. This means that all first-home buyers will have access to the Scheme, regardless of their income.

The limit to the number of places available on the scheme is also removed, and property price caps have increased. In Sydney, the price cap for property purchases has risen from $900,000 to $1.5 million, and Brisbane and Queensland regional centres saw a $300,000 jump from $700,000 to $1 million. Weaker housing markets, like Darwin and Hobart, did not see significant changes in price caps.

What does the Home Guarantee Scheme expansion mean for buyers?

The Home Guarantee Schemes expansion means first-home buyers can get into the property market sooner. 

According to the government, the Scheme expansion cuts years off saving for a deposit and saves tens of thousands of dollars on Lenders Mortgage Insurance. With the prominence of Housing Australia, a diverse range of lenders can offer the scheme, giving buyers the choice to buy a home through smaller, customer-owned, and regional banks. 

The results of the expansion to the Scheme are projected to double the number of affordable homes available for first-home buyers.

However, while the Scheme expansion comes with a range of benefits, there are considerations and risks first-home buyers should be aware of: 

• Yes, you won’t need to pay LMI, but there are other costs than just the 5% house deposit. Other costs to consider include stamp duty, pest inspections, building inspections, conveyancing fees, and other legal fees.
• The interest paid over the life of the loan depends heavily on the size of the deposit and the amount borrowed. So, the smaller your deposit and the more you borrow, the more your interest payments will be.
• Supply and demand. With more buyers in the property market due to the Scheme, property prices can rise. 

If you are a first-home buyer, looking into the Home Guarantee Scheme to fast-track putting down a house deposit, it’s crucial to understand the pros and cons of the Scheme. As multi-award-winning builders in Townsville, the team at John Munro understands the ins and outs of the Home Guarantee Scheme expansion and what it means for buyers.

We ensure you understand the Scheme and guide you towards the best decision for your financial and personal situation. Contact John Munro Builders today by calling (07) 4440 5211 or sending an email enquiry.