From October 1, the Home Guarantee Scheme is changing to help more first home buyers get into the property market. Here is what is changing:
- No more income limits (previously $125K for singles, $200K for couples)
- Property price caps are increasing. It will now be $1,500,000 in NSW capital city and regional centres (previously $900,000)
- The cap on the number of available spots is being removed (previously 10,000 per year)
Under this scheme, eligible first home buyers only need a 5% deposit, and won’t have to pay Lenders Mortgage Insurance (LMI).
With these changes, more buyers will be eligible. But there are some important things to keep in mind:
- Buyers still need to meet the lender’s home loan criteria
- Not all banks are part of the scheme
- You’ll still need to cover purchasing costs like stamp duty, legal fees, etc
- Stamp Duty exemptions apply for first home buyers as well. In NSW there is no stamp upto $800,000 and a reduction between $800,000 and $1,000,000
How will this impact property prices? A few things could push them higher:
- More buyers entering the market due to the scheme updates
- Higher price caps letting people spend more
- Recent cash rate cuts, which can increase borrowing power
- A general upward trend already happening in property prices
All of this could mean more competition and higher prices in the months ahead, particularly in the $900,000 – $1,500,000 band. If you want to make the most of the updated scheme, it’s smart to get home loan pre-approval sorted first.
This information is current on 1 October 2025.
