big news for First Home Guarantee in 2025

Big picture first. From 1 October 2025 the Home Guarantee Scheme that includes the First Home Guarantee was expanded. The headline changes are threefold. there are no annual place limits anymore. income caps have been removed for first home buyers. property price caps have been lifted substantially in many capital cities and some regional areas. these reforms mean more eligible buyers can access a 5 percent deposit pathway and avoid lenders mortgage insurance on eligible properties.

Below I explain the changes, what to watch for and provide a clear state by state table showing the commonly reported new price caps for capital cities plus regional examples. these numbers were published by Housing Australia and widely reported by major media and industry outlets. the final column shows a simple comparison to the previous commonly used cap so you can see how much the thresholds moved. always check the Housing Australia postcode search tool for the exact cap that applies to a specific address before you sign a contract.

Quick summary of what’s changed

1. Unlimited places

2. No income caps

3. Higher property price caps from 1 October 2025

These mean that eligible first home buyers with a 5 percent deposit can apply through a participating lender to secure a government guarantee instead of paying LMI on many more properties than before. lenders still apply their standard credit assessments and other eligibility tests apply, for example you must be a first home buyer as defined by the scheme and the property must be owner occupied.

State and territory price caps and comparison table

Notes on the table. the property price caps vary by postcode and by whether a property is in a capital city centre or a regional zone. the table below uses the reported new caps for capital city markets and a representative regional cap where that figure was published. where the exact regional cap varies by postcode, I note that you should confirm on Housing Australia’s postcode tool. sources for the new caps include Housing Australia and major media and industry summaries.

What this means for buyers and brokers

Buyers benefit because more properties will qualify for the 5 percent deposit pathway and a lot more people will be eligible since the previous income thresholds and annual place limits are gone. lenders still do credit checks so high loan to value loans remain higher risk and may attract higher interest rates or stricter serviceability tests from some lenders. brokers need to check participating lender rules, confirm the postcode price cap and help clients understand the long term costs of high leverage. industry voices expect increased demand in markets where caps rose most, particularly Sydney, Melbourne and Brisbane, and some commentators warn upward pressure on prices if supply does not respond.

Short checklist if you are considering applying:

1. Check you meet the scheme’s first home buyer test and owner occupier requirement.

2. Use the Housing Australia postcode search tool to confirm the exact cap for the property you plan to buy.

3. Speak to a participating lender or an accredited broker early so they can confirm your eligibility and reserve the guarantee place if required.

4. Weigh the benefits of avoiding LMI against the risks of a small deposit mortgage and plan for buffer and repayment shock testing.

Final practical note

The expanded scheme takes effect on 1 October 2025 and the official Housing Australia pages are the authoritative source for eligibility rules and postcode specific price caps. always confirm the precise cap and eligibility requirements with your lender before signing a contract of sale.          

Sources and further reading

Housing Australia Home Guarantee Scheme official pages and property price cap tool.

ABC News coverage of the October 2025 expansion.

Industry summaries and state focused updates including Borro and BestPropertyAgent.

Western Australia focused coverage about the Perth cap increase.