Big Changes to the First Home Buyer Scheme – What You Need to Know from October 2025
From 1 October 2025, buying your first home in Australia is about to look very different. The federal government has expanded the First Home Guarantee Scheme, making it easier for more Australians to get a foot on the property ladder.
Here’s what’s changing and what it could mean for you.
What’s New in the Scheme?
✅ Starts sooner than expected – Originally planned for 2026, the changes will now take effect from October 2025.
✅ No income caps or limits on places – All eligible first home buyers can now access the scheme, regardless of income. Unlike the old system, there’s no limit on how many people can apply.
✅ Buy with just a 5% deposit – You won’t need to save a 20% deposit to avoid Lenders Mortgage Insurance (LMI). The government will guarantee part of your loan, meaning you can buy sooner and save thousands.
✅ Higher property price caps – To reflect rising property values, the scheme now allows for more expensive purchases. For example:
NSW metro & regional centres: up to $1.5m (previously $900k)
VIC metro & regional centres: up to $950k (previously $800k)
QLD metro & regional centres: up to $1m (previously $700k)
✅ Simplified access – The Regional First Home Buyer Guarantee will be rolled into the main scheme, making the process easier.
Why the Change?
The government says the goal is simple: remove barriers to home ownership. With deposits and LMI being two of the biggest hurdles for first home buyers, this scheme aims to speed up the process of getting into the market.
It’s also part of a broader plan that includes building 100,000 new homes for first home buyers over the coming years.
What Are the Risks?
While the scheme offers great opportunities, experts have flagged some concerns:
Rising prices: More buyers entering the market could push prices up further, particularly in high-demand areas.
Affordability gap: Those on lower incomes may still struggle if prices rise faster than savings.
Timing: Launching the scheme in the busy spring property season could fuel short-term competition.
Who Benefits Most?
Middle-income earners who can afford repayments but haven’t been able to save a 20% deposit.
First-time buyers looking to avoid paying tens of thousands in LMI.
Buyers in metro areas where higher price caps now bring more properties within reach.
Final Thoughts
The expanded First Home Buyer Scheme could be a game-changer for many Australians ready to step into the property market. But as with any big financial decision, it’s important to weigh up both the opportunities and risks.
If you’re thinking about buying your first home after October 2025, now is the perfect time to get prepared. From checking your borrowing power to exploring how the scheme could apply to you, the right guidance can help you make the most of this new opportunity.
Need help navigating the new scheme? At Radian Home Loans, we specialise in helping first home buyers find the right loan and secure their dream home. Get in touch today — your journey home starts here.