Home Guarantee Scheme expanded
The Australian Government has announced it will expand its Home Guarantee Scheme to eliminate caps on number of places and income. The changes are effective from 1 October 2025.
What is the Home Guarantee Scheme in Australia?
The Home Guarantee Scheme is an initiative introduced by the Australian Government to help buyers enter the property market sooner. It enables eligible buyers to purchase property with a deposit size of 2% or 5% (depending on the guarantee) without having to pay for lenders mortgage insurance (LMI), which is an additional cost often charged for deposits under 20%. The guarantees are:
- First Home Guarantee
- Family Home Guarantee
How does the Home Guarantee Scheme work?
For the Home Guarantee Scheme, Housing Australia guarantees the loans of eligible buyers. This guarantee enables the buyer to borrow up to 95% or 98% (depending on the guarantee) of the property value through participating lenders without having to pay LMI. This helps reduce the upfront costs for buyers.
Keep in mind you will still be responsible for additional costs such as stamp duty, legal fees and loan application fees where applicable.
Who is eligible?
Eligibility criteria varies depending on the guarantee, but includes the following:
- Citizenship: must be an Australian citizen or permanent resident
- Owner-occupier: must live in the property (investment properties are not included)
- Deposit: have a minimum 5% deposit for the First Home Guarantee, or 2% for the Family Home Guarantee
- Age: Must be at least 18 years old
- Type of applicant: for the First Home Guarantee, applications can be from an individual or two applicants (with a friend, family member or partner). Applicants for the Family Home Guarantee must be a single parent or legal guardian of one or more dependent children
- Loan: the loan must be through a participating lender. It must be an owner-occupier loan paying principal and interest for a loan term of up to 30 years.
- Previous ownership: the First Home Guarantee is only available to applicants who have not owned a property in the last 10 years. The Family Home Guarantee requires the applicant to not have any other property interest once the new home is settled.
- Income: income caps do apply until 1 October when these will be removed. Before this time the caps are $125,000 for individual applicants and $200,000 for joint applicants (based on taxable income from the previous financial year).
What property is eligible?
The scheme is open to new and existing residential properties in Australia, including:
- House, townhouse or apartment
- House and land package
- Vacant land with a contract to build a home
- Off-the plan apartment or townhouse
Property price caps
The property prices caps will change 1 October 2025 to the following:
|
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 |
Source: Housing Australia
How to apply
Speak to your broker to confirm your eligibility. We can then help you find the right participating lender for your circumstances and walk you through your loan application.