First Home Buyers: 5% Deposits Coming in October 2025

If you’ve been dreaming about buying your first home but feel like saving for a 20% deposit is impossible, there’s some good news. From 1 October 2025, the Government is expanding the First Home Buyer Guarantee, which means you could buy a home with just a 5% deposit.

This change is happening earlier than planned. It was originally set to start in January 2026, but it’s now kicking off three months sooner.

So what’s actually changing? Up until now, the scheme had limits, things like caps on numbers, income thresholds, and lower property price caps. From October next year, those restrictions will be lifted. That means:

• All first home buyers can apply (no yearly caps)
• No income limits, so higher earners can also access the scheme
• Higher property price caps to keep up with the market
• The government guarantees part of your loan so you can avoid paying Lenders Mortgage Insurance (LMI)

For first home buyers, this could make a big difference. It could shave years off the time it takes to save, help you avoid thousands in extra costs, and open the door to a wider range of homes.

Of course, it’s important to remember that more people buying can increase competition and push prices higher. And while a smaller deposit can help you get in sooner, it also means taking on a bigger loan.

As Katrina puts it:

“I know how overwhelming it can feel trying to save a 20% deposit while watching property prices rise around you. This scheme could give buyers a way in sooner, and for some families, that’s life-changing. Sometimes getting started is the most important step.”

The key is to be prepared. By the time October 2025 arrives, banks will be competing hard for first home buyers. If you’ve already got your finances sorted, you’ll be in the best position to move quickly when the scheme opens.

If you’d like to know how this might work for you, I’d love to sit down and go through it together. Buying your first home is such an exciting step, and I’m here to make sure you feel supported every step of the way.

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