If youve been dreaming of buying your first home theres some fantastic news you need to hear From 1 October 2025 the Australian Governments First Home Guarantee Scheme soon to be called the 5 Deposit Scheme is getting a major upgrade and the changes are designed to make home ownership more accessible than ever before
Let’s break down what’s changing and what it means for you.
The Key Updates You Should Know:
1. Unlimited Places 🎉
In the past, the scheme had a strict cap on the number of spots available each financial year. Once they were gone, that was it.
Now? No more limits. If you’re eligible, you can apply any time. This means no more waiting lists or missing out because you weren’t quick enough.
2. No Income Thresholds 🚫💰
Previously, there were income limits that restricted who could access the scheme. Those limits are now gone. That means higher-income earners – who might still be struggling to save a full 20% deposit thanks to Melbourne’s property prices – can also take advantage of the program.
And since there are no income caps, you also won’t need to provide your ATO Notice of Assessment anymore.
3. Higher Property Price Caps 🏡
To reflect today’s market conditions, the property price thresholds have been increased. That’s particularly helpful for Melbourne buyers, where the market can move quickly and affordability has been a big barrier. You can find the exact updated price caps on Housing Australia’s website, but the good news is that the scheme now better matches the reality of house prices in 2025.
4. New Names and Streams 🔄
- The scheme has been restructured and renamed to make things simpler:
- Home Guarantee Scheme → 5% Deposit Scheme
- First Home Buyer Guarantee → General Stream
- Family Home Guarantee → Single Parent Stream
- Regional First Home Buyer Guarantee → Consolidated into the General Stream
This refresh not only simplifies things but also makes it easier to understand which stream applies to you.
5. Occupancy Rules 📝
One important detail to keep in mind:
You’ll need to live in the property within six months of settlement (or six months from the occupancy certificate if it’s a new build). You’re required to stay in the property for the duration of the guarantee period, unless an exemption applies.
This scheme is all about helping people into homes they’ll actually live in, not investment properties.
Why This Matters for Melbourne Buyers
Buying in Melbourne has always been a challenge – with rising property prices, saving a 20% deposit can feel impossible. The beauty of this scheme is that it allows you to buy with just a 5% deposit and avoid paying Lenders Mortgage Insurance (LMI), which can save you tens of thousands of dollars.
With the removal of income thresholds and unlimited places, far more buyers can access the scheme than ever before. Whether you’re a young professional, a growing family, or a single parent, this opens new doors to home ownership.
How Home Loans Australia Can Help:
Navigating the ins and outs of government schemes can be confusing – and that’s where a mortgage broker comes in. Here’s how I can help you:
✔️ Work out if you’re eligible under the new rules
✔️ Help you understand the updated property price caps in Melbourne
✔️ Compare lenders (not just the big banks) to find the best deal for your situation
✔️ Guide you through the application and guarantee process step-by-step
The changes coming in October mean it’s the perfect time to revisit your options and see if 2025 could be the year you finally step into your own home.
Final Thoughts
The updated 5% Deposit Scheme is a game-changer for first home buyers. With unlimited spots, no income thresholds, and higher property caps, it’s never been easier to take that first step into the market.
If you’re curious about how these changes could help you, or if you’re ready to start the journey, reach out today. Let’s explore your options and get you closer to your first set of keys.
📩 Contact me today to book a chat about your first home journey.
