If you're a first home buyer and you haven't looked at the Home Guarantee Scheme since 2024, stop and re-read the rules. Everything changed.
What it is now
From 1 October 2025, the federal 5% Deposit Scheme was expanded. Income caps, gone. The old $125k single and $200k couple limits no longer exist. Place limits, gone. Previously capped at 35,000 spots a year, now unlimited.
And the price caps jumped. Up to $1.5 million in Sydney. $1 million covers Brisbane, the Gold Coast and the Sunshine Coast.
The deal itself is unchanged. Buy with a 5 percent deposit, the government guarantees up to 15 percent, and you skip lenders mortgage insurance entirely. On a $1 million Brisbane purchase, that's a $50k deposit instead of $200k, and roughly $40k of LMI you never pay.
For a lot of people, that's five to ten years of saving deleted.
The catch
Here's what the brochures don't dwell on. When you make it dramatically easier for every first home buyer to buy, every first home buyer shows up at the same open homes.
Treasury's own modelling put the price impact at around half a percent over six years. Plenty of analysts think that's conservative, especially in the segments under the caps. What's not in dispute is where the competition concentrates: properties priced just under the caps, in the suburbs first home buyers actually want.
So the scheme gets you to the table years earlier. It also fills the table.
The second catch
A 5 percent deposit means a 95 percent loan. Bigger loan, bigger repayments, more interest over the life of it, and less equity buffer if prices dip in your suburb. The scheme removes the deposit barrier, not the maths.
That's not a reason to avoid it. It's a reason to buy carefully, because you have less room for a mediocre purchase.
Playing it well
Two things matter. Know your real numbers before you shop. Our borrowing power calculator and mortgage repayment calculator will show you what a 95 percent loan actually costs month to month.
And go in with someone who knows the local competition. In scheme-cap price brackets, the buyer with professional representation consistently beats the crowd bidding on vibes. Converta matches you with a vetted buyer's agent who specialises in your market and budget. Free, no obligation, first call within 24 hours.
If you're in Queensland, the schemes stack even further; see our breakdown of the full Queensland first home buyer picture.
Sources: Housing Australia, Treasury, October 2025 scheme changes.