For many Australians, the dream of owning a home feels just out of reach with rising property prices, hefty deposits, and lenders’ mortgage insurance (LMI) acting as barriers. But a government-backed program is changing the game: the Home Guarantee Scheme Australia.
In a recent podcast episode, mortgage broker Jake shared insights into the scheme, its new updates for First Home Guarantee 2025, and how it can help first-time buyers step onto the property ladder sooner.
“The home guarantee scheme is essentially a government-backed program that allows first home buyers to get into the market with a smaller deposit,” Jake explained.
Instead of saving the traditional 20% deposit, eligible buyers can purchase with as little as 5% upfront without paying lenders’ mortgage insurance. The government acts as a guarantor for part of the loan, which removes one of the biggest financial hurdles for first home buyers.
The First Home Buyer Scheme is open to:
Jake noted this often helps people who may have sold a previous home years ago or left the property market due to life changes, such as a relationship ending or starting a business.
From October 1, 2025, the scheme is more accessible than ever:
“These changes mean buyers don’t need to rush into the scheme,” Jake said. “But it also opens the door for higher-income earners and more competition in the market.”
Importantly, the scheme can be layered with state-based incentives such as stamp duty concessions and first home buyer grants. However, Jake cautioned that rising property price caps may push some buyers above their state’s stamp duty thresholds which could mean paying tens of thousands more upfront.
“It’s something every buyer needs to factor in,” he said. “The sweet spot will be properties that qualify for both the federal guarantee and state-based concessions.”
While grants and concessions can help, banks still require proof of financial discipline.
“Genuine savings is simply money you’ve saved over time,” Jake explained. “Most lenders want to see your 5% deposit sitting in your account for at least three months. Some may also accept rental history as proof.”
This ensures buyers demonstrate they can consistently save and manage repayments long-term.
Jake’s biggest advice? Talk to a broker early.
“Even if you think you’re years away, a quick chat with a broker can help you understand where you stand,” he said. “We’ll check eligibility, run serviceability calculations, and guide you through pre-approval.”
Once pre-approved, buyers have 90 days to find a property and sign a contract. From there, the broker helps manage final approvals, settlement, and the move into your first home.
While the scheme opens doors, Jake highlighted a few common traps:
Perhaps the biggest misconception is that the government is giving money. “They’re not handing you cash,” Jake clarified. “They’re guaranteeing part of your loan. You’re still borrowing and repaying the full amount.”
The First Home Guarantee 2025 is a game-changer for Australians chasing their first property, helping them sidestep LMI and get into the market sooner. But as Jake reminded listeners, success comes down to preparation.
“It’s never too early to chat to a broker. We’ll help you figure out if you’re ready now, or what steps you need to take to get there,” he said.
With the right planning and the right advice, your first set of house keys might be closer than you think.
Jake can help you with:
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