Good news if you are saving for your first place: From 1 October 2025 the federal Home Guarantee Scheme gets a serious tune-up. The price caps jump, income limits go, and the number of suburbs that fit the rules almost doubles. Cotality’s latest chart pack shows 63.1% of markets nationally will sit under the new limits, up from about one third before. That includes 51.6% of house markets and 93.7% of unit markets.
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What is changing on 1 October
Housing Australia is widening the gates. From 1 October you can buy with as little as 5% deposit and avoid LMI because the government guarantees part of the loan. Income caps are removed, there are no place limits, and the price caps are higher across most regions. Regional access under the First Home Guarantee is also simpler. It is not a cash payment, but it does make the deposit hurdle smaller.
New price caps at a glance
Standouts include:
- VIC capital city and regional centre: up to $950,000
- QLD capital city and regional centre: up to $1,000,000
- NSW capital city and regional centre: up to $1,500,000
More properties qualify
- 63.1% of all markets will now sit under the caps
- 51.6% of house markets and 93.7% of unit markets qualify
- Biggest lift for houses: Adelaide, where qualifying suburbs jump from 2.9% to 46.6%
- Biggest lift for units: Brisbane, from 36.9% to 97.5%
Cotality economist Kaytlin Ezzy says the changes give first-home buyers “greater choice” and better align caps with real-world prices. She does note demand support can push prices a little higher.
Melbourne snapshot: before vs after the cap rise
Cap change for Melbourne and Geelong: from $800,000 to $950,000.
Before, under $800k, buyers were typically looking at middle and outer-ring houses such as:
- Thomastown: around $734k median house value
- Frankston: around $783k
- Narre Warren: around high-$700ks to low-$800ks across 2025
After, up to $950k, more family suburbs come into play, for example:
- Keilor Downs: around $865k median house value
- Healesville: around $860k
- Mill Park: low-$800ks
Remember, use medians as a guide only and check individual properties against the cap with your lender.
HGS vs FHOG. Can you use both?
Think of the Home Guarantee Scheme as a deposit and LMI helper. It lets you get in with a smaller savings target because the government provides a guarantee to your lender. The First Home Owner Grant is different. It is a state-based cash grant and in Victoria it is $10,000 for buying or building a new home up to $750,000, with residency rules. Many buyers use the HGS alongside the FHOG and, where eligible, first-home buyer stamp duty relief. Your lender or conveyancer can help you apply for the lot if you qualify.
What others are saying
Supporters see a fairer start for buyers who do not have family help. Critics warn that, without more new homes, easier access can nudge prices higher. It’s a familiar tension: help buyers now, but keep an eye on supply so the market doesn’t heat up too fast.
How to use this if you are buying
- Check the new cap for your target area by visiting Housing Australia.
- Talk to a mortgage broker about the HGS and your borrowing capacity.
- Stack the help where you can. Ask about FHOG for new builds and first-home stamp duty relief in Victoria.
- Shop suburb-by-suburb. The cap opens more of Melbourne’s mid-range properties for consideration. Medians are guides, so verify each property’s price against the cap.
Source: Figures and market coverage are from Cotality’s Monthly Housing Chart Pack, September 2025. Price-cap settings and examples are from Housing Australia. Commentary includes reporting from ABC News.
