From 1 October 2025, the Australian government has rolled out major updates to help first home buyers get on the property market.
With smaller required deposits, no income limits and increased property price caps, more people and more properties are now eligible.
Lower deposit requirements
For a while now, home buyers needed a 20% deposit to get a home loan or they’d be faced with an LMI charge on top of everything else they borrowed.
There are two schemes already in place that have changed this:
- Single parents can apply with a 2% deposit through the Family Home Guarantee Scheme
- First-time buyers can apply with a 5% deposit through the First Home Guarantee Scheme
While the schemes were already in place, the Albanese government has extended them and changed the requirements of them in favour of borrowers.
October changes benefiting home buyers
There are three main changes to the schemes that kicked in on 1 October 2025:
- Unlimited places
- No income limits
- Higher property caps
Unlimited places
Previously, the First Home Guarantee (or its predecessor, the First Home Loan Deposit Scheme) was limited to 50,000 applicants a year. Looking at mortgage stats, this covers less than half of first-time buyers every year.
With the new changes in place, there’s no limit on places. Most, if not all, of new buyers will be able to get in with the new rules.
No income limits
Both schemes previously had income limits:
- Family Home Guarantee: $125,000 per applicant
- First Home Guarantee: $125,000 for a single applicant, $200,000 combined income for a couple
The changes mean there’s no income limit. So no matter how much you earn, you’ll be able to benefit from the lower deposit requirements.
Higher property caps
Until now, there have been limits on the value of the property you could buy. This price cap changed depending where in the country you were: $900k in Sydney, $800k in Melbourne and $600k in Hobart, to name just a few.
In October, this goes up to $1.5m in Sydney, $950k in Melbourne and $700k in Hobart, as well as similar increases in other states.
A full list of the new property caps can be seen here.
Buying your first home
If you’re looking to buy your first home, it can be a daunting process. For free help, contact our team of brokers for expert advice and the best chance of getting the lowest mortgage rate available to you.
