For many Australians, buying that very first home can feel like a distant dream, especially with rising house prices and the challenges of saving a deposit. That’s why the First Home Guarantee has become such an important helping hand.
Originally, the government’s expanded changes to the scheme were scheduled to begin in January 2026. But in a move to give first-home buyers a faster pathway into the market, these changes have now been accelerated to commence from 1 October 2025.
So, what does this mean for you if you’re hoping to get your foot on the property ladder? Let’s break it down.
What Is the First Home Guarantee?
At its core, the First Home Guarantee helps Australians buy their first home sooner by reducing the deposit hurdle. Here’s how it works at a high level:
- Normally, lenders require a 20% deposit to avoid Lenders Mortgage Insurance (LMI). For many buyers, saving that much can take years.
- Under the scheme, eligible first-home buyers can purchase a home with as little as a 5% deposit.
- The government (through Housing Australia) then guarantees up to 15% of the loan, meaning the lender does not require LMI.
- Applications must go through participating lenders, not every bank or broker can access the scheme.
This guarantee isn’t cash paid to buyers; instead, it’s security provided to the lender, which lowers the barriers to getting approved.
What’s Changing From 1 October 2025
The key update is timing. The government’s broader changes to the First Home Guarantee will now roll out from 1 October 2025 instead of January 2026.
This acceleration means:
- First-home buyers will be able to take advantage of the new rules three months earlier.
- Those planning to buy toward the end of 2025 can access the scheme without waiting until the new year.
- It may also line up more conveniently with the spring property market, when more listings and opportunities are available.
While the government has not yet detailed every adjustment in scope for the October 2025 rollout, the key point is that support for buyers will arrive sooner than expected which is a huge win for those trying to get into the market earlier.
Why This Matters for First-Home Buyers
The scheme is especially powerful for Australians who:
- Struggle to save a 20% deposit while also managing rent and cost-of-living pressures.
- Want to buy sooner, rather than spending years saving while house prices continue to rise.
- Prefer to avoid paying LMI, which can add tens of thousands of dollars to the cost of a loan.
By reducing upfront barriers, the scheme can shave years off the time it takes to buy a first home.
Next Steps Checklist
If you’re thinking about using the First Home Guarantee Scheme, here’s a simple checklist to guide you:
- Check your eligibility
Review the basic criteria for income, citizenship, and property type. - Confirm local price caps
Housing Australia sets maximum property price caps depending on your city or region. - Gather your documents
This usually includes proof of income, ID, and evidence of your savings history. - Speak to a participating lender
Not every bank or broker offers the scheme, the team at Elders Finance can walk you through the process. - Understand owner-occupier obligations
Properties purchased under the scheme must be lived in by the buyer (not rented out as an investment).
Final Note
The First Home Guarantee is a valuable pathway into the property market for many Australians, and with the changes now starting on 1 October 2025, the opportunity is coming around sooner.
This blog provides general information only. For full eligibility details and current rules, you should check directly with Housing Australia or speak with an Elders Finance expert.