Big Changes are Looming for First Home Buyers - What You Need to Know

It's the announcement that took us by surprise - that on 1 October this year, the conditions for Housing Australia's First Home Guarantee Scheme (FHGS) will be relaxed significantly, paving the way to (hopefully) easier property ownership for first home buyers (FHB) in Australia.

Paying HECS for a double degree probably means it's been tricky saving 20% to buy a home...

What's Changing?

A fair bit, actually:

• No limits on places in the scheme - if you're a first home buyer who's saved a 5% deposit, you're welcome to apply

• Income caps are gone, opening up places to those earning more, but who haven't been able to save 20%

• Property Price caps are increased

• And lastly, the Regional FHGS (using this has been like splitting hairs) will now be replaced by the First Home Guarantee. Which resolves a LOT of confusion!

  First Home Guarantee | Housing Australia

Do I qualify?

If you're a first home buyer - or you haven't owned a property in Australia for over 10 years, are an Australian citizen or resident and have saved 5% via genuine savings and you're after an owner-occupied home - highly likely!

Can I buy an Investment Property using the Scheme?

No. The intent of the programme is to get as many Australians into their own homes as possible.

Is it Free Money? Does the Government Pay the 15% of my deposit?

No cash is handed over - it's a guarantee of the gap between what you've saved, up to the 20% which is required to avoid paying LMI - saving you thousands.

You'll still need to service the whole amount, regardless of the portion the government secures. So if you've saved 5% deposit, and you use the scheme for 15% - you still repay the entire amount - it's not 15% off your loan!

Can I Apply before October 1?

While the changes aren't in effect until October, you can be ready, and we can seek pre-approval with the banks!

If you're PAYG, collate your recent payslips, bank statements and ensure your tax is reasonably up to date. If you're self-employed, make sure your business information is current and tidy.

While there are plenty of calculators for borrowing capacity available, it's not normally so straightforward which is why of course we always recommend using a mortgage broker experienced with FHB (hiiii!).

A quick needs analysis questionnaire and a privacy consent from you allows us to quickly assess your information and provide you with the best loan options for you.

Does it Cost Extra to use a Broker Instead of Going Straight to a Bank?

No - in fact the opposite. As your broker, my role is to understand what you're looking for in a loan, whether that be the lowest rate (popular) - or to maximise your borrowing capacity. You pay us nothing, we get the most competitive product options from our broad market - and once your loan is settled, the bank pays us. (Yes, being a broker means a LOT of unpaid work...good thing we love it!)

FAQs:

Who’s eligible? First home buyers - or people who haven’t owned a property in Australia for the past 10 years. You must live in the home you buy.

Broker’s Tip: If you owned years ago but sold, you might still qualify - worth checking before you rule yourself out.

What’s the minimum deposit? 5% genuine savings. The government guarantee covers the rest up to 20% so you avoid LMI.

Broker’s Tip: Keep that 5% sitting in your account for at least three months - lenders like to see it’s really yours.

Are there income limits? No - from 1 October, income caps are gone.

Broker’s Tip: High earners, you’re finally included. If you thought the scheme wasn’t for you, time to look again.

Do I have to use all my savings? Most lenders will allow you to keep about $15k to use towards legals and moving costs and furniture.

How much can I spend on a property? Price caps are rising significantly (for example, Brisbane up to $1M, Perth up to $850k). Check the cap for your region before you buy.

Broker’s Tip: Don’t just look at the cap - talk to me about what the banks will actually lend you. They’re not the same number.

Do I apply directly to the government? No - you apply through a participating bank or broker (like me).

Broker’s Tip: Not all lenders are in the scheme. I can help you steer toward the ones who are.

Does it cost anything to use the scheme?

No extra cost. It’s not a cash handout, but it can save you tens of thousands in LMI.

Broker’s Tip: Run the numbers - that saving might free up cash for your move or furniture.

When do the changes kick in? 1 October 2025

Broker’s Tip: Use September to get pre-approvals sorted so you’re ready to strike as soon as the new rules switch on.

Plan now, so you can act fast. We are here to help you, so call us today - 0414864402

For the full info, head to: Housing Australia | The Independent National Housing Agency