First Home Guarantee Scheme Changes: What Buyers Need to Know in 2025
If you’ve been saving for your first home, there’s exciting news on the horizon. From the 1st of October 2025, the Federal Government is making major changes to the First Home Guarantee Scheme and it could completely reshape the way first home buyers across Australia step into the property market.
As a mortgage broker in Brisbane working with clients nationwide, we’ve broken down the key updates, what they mean for first home buyers, and how you can prepare.
What’s Changing with the First Home Guarantee?
Here’s what’s coming into effect from October 2025:
Unlimited spots: No more capped allocations. If you’re eligible, you can access the scheme.
Income caps scrapped: High-earning buyers will no longer be excluded, meaning more Australians can qualify.
Property price caps increased: This is the big one. The caps are being lifted across the country, opening more suburbs and property types to first home buyers.
For example, in Brisbane and other capital cities, the cap will rise to $1,000,000. In regional Queensland and other non-capital areas, the cap jumps to $700,000. Similar increases apply across Sydney, Melbourne, Adelaide, Perth, Hobart, Darwin and regional centres.
Why This Matters for First Home Buyers
Saving a 20% deposit has always been one of the biggest barriers to buying a home. With the First Home Guarantee, you only need a 5% deposit, and you can avoid paying Lenders Mortgage Insurance (LMI), a cost that can run into tens of thousands of dollars.
The raised property price caps mean buyers are no longer restricted to entry-level homes in outer suburbs. For instance, in Brisbane, many suburbs closer to the CBD will now fall under the $1M threshold. In Sydney and Melbourne, it will give access to more townhouses and family homes that were previously off-limits.
What Buyers Should Watch Out For
While these updates are designed to make homeownership easier, there are still some things to keep in mind:
Competition will increase: More eligible buyers means higher demand in popular suburbs under the new caps.
Hidden costs remain: Stamp duty, conveyancing, inspections, and moving expenses are still part of the process.
Interest rate sensitivity: Low deposit loans can stretch your budget if rates rise. It’s important to have a buffer.
How to Prepare Before October 2025
If you’re thinking about buying, here’s how you can position yourself to take advantage of the new rules:
Get pre-approved early: Working with a mortgage broker means you’ll be ready to act when the right property comes up.
Research your market: Look at what the new caps mean in your city or region. For example, in Brisbane the $1M cap opens suburbs like Carina Heights, Stafford, and parts of Holland Park, while in regional Queensland the $700k cap unlocks more coastal lifestyle options.
Budget realistically: Factor in repayments at today’s rates — and allow a buffer for future increases.
Look for growth potential: Choose suburbs with strong infrastructure, transport links, and long-term demand to build equity faster.
Final tip: These schemes often have limited spots or timeframes, so planning ahead is key.
FINAL THOUGHTS
Whether you’re buying in Brisbane, Sydney, Melbourne, Perth, Adelaide, Hobart, Darwin, or regional centres across Australia, these updates open up new opportunities.
As mortgage brokers based in Brisbane, we work with clients nationwide to secure the right loan structure, maximise benefits under government schemes, and help first home buyers move into their homes sooner.
If you’d like to explore your eligibility and see how these changes can work for you, reach out today — getting the right strategy in place could save you time, money, and stress on your journey to homeownership.
