Big News: Home Guarantee Scheme expansion brought forward
02/09/2025
For first home buyers, the deposit hurdle is often the biggest barrier to getting into the market. The Albanese Government has now announced that its promised expansion of the Home Guarantee Scheme (HGS) will kick off earlier than planned – from 1 October 2025 (instead of January 2026).
This means that from October, all eligible first home buyers across Australia will be able to purchase with as little as a 5% deposit, without the usual income or location caps that previously applied. Even better, the government has also announced higher property price limits, bringing them closer in line with current market values.
What’s changing with the HGS?
Why the HGS changes matter
The government points out that the median home price in Australia is now $844,000, which means even a 5% deposit is over $42,000. Twenty years ago, that same amount could have been a full 20% deposit.
For many Australians, saving a 20% deposit can take close to a decade – all while still paying rent.
With the expanded Home Guarantee, buyers can enter the market with just a 5% deposit and avoid paying Lenders Mortgage Insurance (LMI), which often adds tens of thousands to the cost of a loan.
For example, under the new rules a first home buyer in Perth could purchase an $850,000 home with a $42,500 deposit. That’s up to 10 years less time spent saving, around $35,000-$40,000 saved in LMI, and more money directed into paying off your own home rather than someone else’s rental property.
Since 2022, more than 180,000 buyers have already entered the market under the scheme, avoiding over $1.5 billion in mortgage insurance costs in the first year alone.
Eligibility for the HGS
The expanded Home Guarantee Scheme will be open to all Australian citizens and permanent residents, who are at least 18 years old and buying their first home – or have not owned a property in Australia in the last 10 years – with at least a 5% deposit. Unlike the current scheme, there will be no income caps or location restrictions, making it far more accessible.
Importantly, the definition of “first home buyer” has been broadened – meaning that singles, couples, siblings, and even friends will be able to apply together. This opens the door for family members or mates to pool their resources and buy a property sooner.
What this means for you
If you’re looking to buy your first home in WA, this expansion could make a huge difference:
If you’re thinking about buying in the next 6-12 months, it’s worth getting advice early. Lending policies, eligibility, and the finer details still vary by lender. At The Loan Company, we’ll keep you updated and help you work out the best path to home ownership under the new rules.
Need advice on how the HGS changes could work for you?
Get in touch with our team – we’ll help you understand your options and take advantage of the new Home Guarantee when it launches in October.
