The New 5% First Home Buyer Scheme Starts this Wed 1 October

Its Quite the Change.

Author

Reggie Hart
September 26, 2025

Somewhere I was having some fun last weekend in Northern NSW

The new 5% first home Guarantee Scheme starts this Wednesday 1 October 2025.

What does it mean for you?

Any first home buyer with any income (not like the previous scheme where there were income limits) can effectively purchase a home with a 5% deposit and without having to pay Lenders Mortgage Insurance.

New maximum home prices:

Sydney (plus Newcastle, Illawarra and Lake Macquarie) $1,500,000

Regional NSW $800,000

Melbourne (plus Geelong) $950,000

Canberra $1,000,000

Brisbane (plus Gold Coast and Sunshine Coast) $1,000,000

Regional QLD $700,000

The link with the full announcement is here:

Unlimited places, higher property price caps for first home buyers from 1 October 2025

Housing Australia welcomes the Australian Government’s expansion of the Home Guarantee Scheme (Scheme) with unlimited places and increased property price caps to help more Australians to buy their first home, sooner.

www.housingaustralia.gov.au/media/unlimited-places-higher-property-price-caps-first-home-buyers-1-october-2025

Of course, first home buyers need the income to service these size loans, but there is not an insignificant number of first home buyer couples (especially with no kids) who have the income to service these maximums in the capital cities.

Do not underestimate the effect this policy will have on different housing markets.

This new policy affects all buyers, not just first home buyers. If you are a property buyer in the $1.4m mark in Sydney (upsizer, investor, downsizer), you are now competing with first home buyers who couldn’t previously afford to be in your price bracket as they lacked enough of a deposit.

I previously wrote a more extensive article about this topic here:

Is the Proposed Expanded Home Guarantee Scheme Already Driving Up House Prices?

Government intervention in free markets frequently has unintended consequences.

thunderboltwealthsnippets.beehiiv.com/p/is-the-proposed-expanded-home-guarantee-scheme-already-driving-up-house-prices

If you would like to discuss this matter and how it could affect you, please get in touch.

Interest Rates

The next RBA interest rate announcement is Melbourne Cup day. Usually at 2.30pm, about the time when people are falling over in the streets in their finest clobber after too many drinks. A number of forecasters have recently quietly walked back their forecasts of more rate cuts, now expecting rates to be on hold for some time, into the middle of next year. Could this take a little heat out of the market? I suspect so.

2025 Rushes By

Just 62 business days left until Christmas Day and we say goodbye to 2025. Where on earth did it go? What are your property intentions for 2026? Trying to get into the market? Upgrade? Downsize? Lets get your plans in place for the new year.

Have a great day, make sure you do something fun amongst all the work.

Reggie