The Federal Government has introduced significant changes to the Home Guarantee Scheme, effective 1 October 2025. These reforms aim to expand access to the housing market by removing key restrictions and increasing price caps, while maintaining core eligibility conditions. The changes will benefit many prospective buyers but also require careful consideration of risks.

• Buyers may enter the property market with a deposit as low as 5% (or 2% under the Family Home Guarantee).
• The Government guarantees up to 15-18% of the loan, removing the requirement for Lenders’ Mortgage Insurance (LMI).
• The guarantee is not a loan or cash grant but a commitment to the lender to cover part of the risk.
• Most major lenders are participants in the scheme.

Key changes effective from 1 October 2025 include:

• Removal of the cap on the number of applicants.
• Abolition of income thresholds.
• Increases to house price caps, with limits in NSW now $1.5 million in metropolitan/regional centres and $800,000 elsewhere.

However, several conditions remain unchanged:

• A minimum deposit of 5% is still required.
• Properties must be owner-occupied.
• Applicants must be Australian citizens or permanent residents.
• Applicants must not have owned property in the past 10 years.
• Standard lender credit and serviceability criteria still apply.

• Borrowers will benefit from reduced upfront costs but may face higher repayments with larger loan amounts.
• Higher loan-to-value ratios increase the risk of negative equity if property values fall.
• Additional costs such as stamp duty, legal fees, and moving expenses remain unchanged.
• Eligibility under the Scheme does not automatically extend to other concessions, such as first home buyer stamp duty exemptions.

EdenYork provides tailored advice on the Home Guarantee Scheme and related concessions, helping buyers understand eligibility, assess risks, and structure transactions effectively.

Written by Meray Doueihi

Meray Doueihi

Real Estate Project Director

meray.doueihi@edenyork.com.au