Big Wins for First Home Buyers: What the October 2025 Changes Mean for You
- Aly Walsh
- Sep 26
- 3 min read
Buying your first home is about to get a whole lot easier. From 1 October 2025, major updates to the Federal Government’s First Home Buyer Scheme will give Australians more opportunities to get a foot on the property ladder. Whether you’ve been saving for years or just starting to plan, these changes could save you thousands and open doors that were previously out of reach. Here’s what you need to know.
The First Home Buyer Scheme changes coming on 1 October 2025 are designed to reflect today’s property prices and give more Australians the chance to buy sooner.
1. 5% Deposit – No Lenders Mortgage Insurance
The core benefit of the scheme remains: eligible buyers can purchase a home with as little as 5% deposit without paying Lenders Mortgage Insurance (LMI). The government guarantees up to 15% of the loan, effectively bridging the gap that normally triggers LMI. This can save first home buyers tens of thousands of dollars and years of extra saving.
2. Unlimited Places
In the past, the scheme was capped each year and spots would run out quickly, leaving many buyers disappointed. From 1 October, the cap is removed entirely. You won’t need to rush to apply on day one or worry about missing out because of limited places.
3. No Income Limits
Previously, buyers had to fall below strict income thresholds to qualify. These limits have now been scrapped, meaning first home buyers at any income level can access the guarantee. This is a game-changer for couples and professionals whose earnings might have pushed them just over the line in the past.
4. Higher Property Price Caps
Another significant improvement is the lift in maximum property prices. In recognition of today’s market realities, the new caps are far more generous:
Sydney: up to $1.5 million (previously $900,000)
Melbourne: up to $950,000 (previously $800,000)
Brisbane: up to $1 million (previously $700,000)
Regional areas will also see meaningful increases, ensuring buyers across Australia can target a wider range of homes without losing access to the scheme.
5. Simplified Access
The Regional First Home Buyer Guarantee will merge into the main program, streamlining the process and reducing confusion. Whether you’re buying in the city or the country, there will now be one straightforward pathway to apply.
What This Means for Buyers
For first timers, these changes mean more choice, less stress, and faster entry into the market. With no income limits and higher price caps, buyers can consider properties in better locations or with more room to grow without the fear of overstepping the scheme’s boundaries. The removal of the annual quota also creates certainty — you can plan your purchase around your timeline rather than a government deadline.
Tips to Take Advantage
While the updates are exciting, preparation is still key:
Get pre-approval early. Lenders will still require a strong application, even with the government guarantee.
Budget beyond the deposit. Allow for stamp duty, legal fees and moving costs.
Seek professional advice. A buyer’s agent can help you identify properties that meet the new caps and negotiate a smart purchase.
The First Home Buyer Scheme changes coming on 1 October 2025 are designed to reflect today’s property prices and give more Australians the chance to buy sooner. With unlimited places, no income limits, and increased price caps, the dream of home ownership is now more achievable than ever. If you’ve been sitting on the sidelines, now is the time to review your finances and start planning your move.
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*** Disclaimer: The information provided in this blog is intended for general informational purposes only. While we have made every effort to ensure the accuracy and reliability of the content, it should not be considered as personalised or professional advice. The homebuying process can vary based on individual circumstances, property types, and location-specific regulations.
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