Navigating the path to homeownership in Australia has long been a dream for many, yet a daunting challenge due to rising property prices and the significant hurdle of saving a 20% deposit. The good news for aspiring homeowners is that major changes are on the horizon, with the Australian Government expanding its Home Guarantee Scheme (HGS). Effective from October 1, 2025, these changes, as announced by Housing Australia, are set to revolutionise the housing market for first home buyers, offering unlimited places and significantly higher property price caps.

This blog, brought to you by SEED LOANS, your trusted mortgage broker partner, will break down these exciting new developments. We will explore how these changes can help you secure your own slice of Australian real estate sooner, and how our expertise can guide you through the process. Whether you’re a young professional, a growing family, or a single parent, these new opportunities are designed to make your homeownership dreams a reality.

One of the most significant changes coming into effect on October 1 is the removal of the annual place limits for the Home Guarantee Scheme. Previously, a set number of guarantees were released each financial year, creating a rush for applicants and the risk of missing out. The new unlimited places mean that all eligible first home buyers who have saved a minimum 5% deposit will be able to apply for a spot in the scheme.

This is a monumental shift that removes a layer of stress and competition from the home buying process. It transforms the scheme from a limited-access lottery into a permanent, accessible pathway to homeownership. For you, the potential home buyer, this means you can plan your application with confidence, without the pressure of a limited number of spots. It’s a clear signal from the government that they are committed to helping a new generation of Australians enter the property market.

The second major change is the increase in property price caps across the country. In a market where property values have continued to climb, the previous caps were becoming a significant barrier, particularly in major capital cities and popular regional centres. The new, higher caps reflect the current market conditions and will allow first home buyers to purchase a wider variety of properties in more locations.

This is a crucial development. For too long, the price caps have forced buyers to compromise on their location or the type of property they could afford. With the updated caps, you can now consider properties in more desirable suburbs, closer to work, family, or amenities, without being priced out of the scheme. This gives you greater flexibility and choice, making it easier to find a home that truly suits your needs and lifestyle.

Let’s look at some examples of the new caps (note: these are for illustration and subject to specific regional definitions):

• NSW Capital City and Regional Centre: Previously, a cap of $900,000, now increased to $1,500,000.
• VIC Capital City and Regional Centre: A substantial jump from $800,000 to $950,000.
• QLD Capital City and Regional Centre: A massive leap from $700,000 to $1,000,000.

These increases demonstrate a realistic approach to the market and are a direct response to the affordability challenges faced by many Australians.

At its core, the Home Guarantee Scheme is designed to help you buy a home with a small deposit without the need for costly Lenders Mortgage Insurance (LMI). Normally, if you have a deposit of less than 20%, lenders require you to pay LMI, a single-use insurance premium that can cost tens of thousands of dollars and is added to your loan.

Under the HGS, the government provides a guarantee to your lender for a portion of your home loan. This guarantee acts as a form of security, allowing the lender to approve your loan with as little as a 5% deposit, as if you had the full 20%. This saves you a significant amount of money upfront and can reduce the total size of your loan. It’s a powerful tool that helps you get into your own home years sooner than you would by saving for a full 20% deposit.

The changes aren’t just for first home buyers. The Family Home Guarantee, which assists single parents and single legal guardians, is also being expanded. This specific guarantee allows eligible applicants to purchase a home with a deposit of as little as 2% and is now available to a broader range of single parents. This program is a vital lifeline for those who have taken on the primary role of raising children and are often the most impacted by the housing affordability crisis. The expansion of this scheme is a welcome step towards providing more support for single-parent families seeking stable housing.

These changes present a golden opportunity for countless Australians. But navigating the complexities of the Home Guarantee Scheme, understanding your eligibility, and choosing the right loan can still be challenging. This is where SEED LOANS comes in.

As experienced mortgage brokers, we are experts in the various government schemes and can help you leverage these new opportunities. We work with a wide panel of lenders, including those that participate in the Home Guarantee Scheme, to find the best loan product for your unique circumstances. We can:

• Assess your eligibility: We’ll determine which scheme you qualify for and what documentation you need.
• Calculate your borrowing power: We’ll help you understand how much you can realistically borrow, taking into account the new property price caps.
• Streamline the application process: We handle the paperwork and liaise with lenders on your behalf, making the process smooth and stress-free.
• Provide personalised advice: We’re here to answer all your questions and provide tailored advice to help you make informed decisions.

Don’t let the dream of homeownership remain just a dream. With the new changes to the Home Guarantee Scheme, a clear path has been created for you to step onto the property ladder. The time to act is now.

Contact SEED LOANS today to start your homeownership journey. Phone: 0403 323 436 Facebook: https://www.facebook.com/SeedHomeLoansMortgageBroker

According to Housing Australia, the property price caps for the First Home Guarantee and Regional First Home Buyer Guarantee will be increasing on October 1, 2025. This change, along with the removal of place limits and income caps, is designed to help more Australians enter the housing market.

Here are the new property price caps, effective October 1, 2025:

• New South Wales – capital city and regional centre: $1,500,000
• New South Wales – other: $800,000
• Victoria – capital city and regional centre: $950,000
• Victoria – other: $650,000
• Queensland – capital city and regional centre: $1,000,000
• Queensland – other: $700,000
• Western Australia – capital city: $850,000
• Western Australia – other: $600,000
• South Australia – capital city: $900,000
• South Australia – other: $500,000
• Tasmania – capital city: $700,000
• Tasmania – other: $550,000
• Australian Capital Territory: $1,000,000
• Northern Territory: $600,000
• Jervis Bay Territory and Norfolk Island: $550,000
• Christmas Island and Cocos (Keeling) Islands: $400,000

Source: Housing Australia, “Unlimited places, higher property price caps for first home buyers from 1 October 2025” – https://www.housingaustralia.gov.au/media/unlimited-places-higher-property-price-caps-first-home-buyers-1-october-2025