Buying your first home has never been easy—but recent changes to the Federal First Home Guarantee (FHBG) have made entering the property market far more achievable for many Australians.

As of 1 October 2025, the Federal Government significantly updated the FHBG scheme, expanding property price caps across most capital cities and regional areas. These changes have made access to property for eligible first home buyers increase dramatically, particularly in higher-priced markets where the scheme was previously out of reach.

If you’ve been saving for a deposit and wondering whether the 5% First Home Guarantee could work for you, here’s what you need to know.

What Is the First Home Guarantee (FHBG)?

The First Home Guarantee is a Federal Government initiative designed to help eligible first home buyers purchase a property with as little as a 5% deposit, without paying Lenders Mortgage Insurance (LMI).

Under the scheme:

• The buyer contributes a minimum 5% deposit of the purchase price

• A participating lender provides the home loan

• The government guarantees the remaining portion (up to 15%)

This reduces the upfront cost of buying and helps first home buyers get into the market sooner.

What Changed on 1 October 2025?

The most impactful change was a significant increase in property price caps, making the scheme accessible in markets where median prices have risen sharply over recent years.

Previously, many buyers—especially in Sydney, Brisbane, and Perth—were priced out of the scheme. The new caps now better reflect real market conditions.

Updated FHBG Property Price Caps

These increases mean that many first home buyers who were previously excluded can now qualify—even in major capital cities.

Why This Is a Big Deal for First Home Buyers

The updated FHBG caps effectively:

• Align the scheme with modern property prices

• Allow buyers to enter the market sooner with a smaller deposit

• Remove the need to pay tens of thousands of dollars in LMI

• Provide more choice in location and property type

For many buyers, this could be the difference between waiting years longer to buy—or purchasing now.

What Else Should Buyers Be Aware Of?

While the changes are substantial, eligibility criteria still apply, including:

• Being a first home buyer (or not owning property previously)

• Meeting citizenship or residency requirements

• Purchasing an eligible property within the price caps

• Using a participating lender

Final Thoughts

The expanded 5% First Home Guarantee (FHBG) represents one of the most meaningful policy shifts for first home buyers in recent years. With higher price caps across capital cities and regional areas, the scheme now reflects the reality of Australia’s property market far more accurately.

If you’ve been sitting on the sidelines thinking home ownership was out of reach, it may be time to revisit your options and see whether the FHBG could help you take that first step.

Important Disclaimer

This information is provided for general educational purposes only and does not constitute financial or legal advice. Government schemes, eligibility rules and property price caps may change and can differ between states and territories.

Always:

• Check the most current details with your state government or by reviewing the official program guidelines.

• Seek personalised advice from qualified professionals—such as mortgage brokers, financial advisers, or conveyancers—before making any property or financial decisions.

Professional guidance can help you understand how the First Home Guarantee applies to your situation and ensure your decisions are based on the most accurate and relevant information.