Government home buying schemes are being overhauled and it will make the property market more accessible. (Source: Ben Nash/NCA NewsWire)
Getting into the property market in Australia in recent years hasn’t been easy — the deposit, the hoops you need to jump through with the bank, and the mortgage insurance. But as of October 1, 2025, the rules have changed. The government first home buyer schemes have been overhauled in ways that make the property market more accessible than ever.
And the kicker is that these changes don’t just matter if you’re a first-time buyer, they’re also creating new opportunities for property owners looking to upgrade.
The updated ‘first home guarantee’ and ‘help to buy’ schemes bring a number of game changing updates.
You can now buy a property with as little as a 5 per cent deposit (or only 2 per cent if you’re a single parent), without paying lenders mortgage insurance (LMI). Importantly, there are no income caps to access the first home guarantee schemes, where this was previously limited to people on an income of $125,000 (individuals) and $200,000 (couples).
Further to this, the people that can access these schemes have been expanded — permanent residents are now eligible, as are people that want to buy property with a friend or sibling — and even people that have previously owned property but that have been out of the market for the last 10 years can now qualify for support.
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And maybe most importantly, the price caps on properties under these schemes have significantly increased - in Sydney alone this limit has increased from $900,000 to $1.5 million.
And on top of all that, the government co-purchase ‘Help to Buy’ scheme is kicking in, with the government offering to buy part of a property with you — up to 40 per cent for a new build and 30 per cent for existing properties. That slashes both your mortgage and deposit needed to get into the market.
Why this matters
To put this in context, right now it takes the average first home buyer in a capital city around six years to save a 20 per cent deposit. Under these schemes, you can get into the market with just 5 per cent, cutting years off your timeline.
And the savings on mortgage insurance are significant, on a $1 million home, avoiding LMI can save you over $40,000. That’s money you now don’t need to hustle to save, or add to your debt.
In Sydney, where the new property price cap is $1.5 million, you could now purchase a $1.2 million property with just $60,000 saved and avoid LMI altogether — an opportunity that didn’t exist in the past.
And upgraders may benefit
If you already own property that’s within the new price caps but want to upgrade to something above them, these changes could actually make that move easier.
As more buyers chase properties under the price caps, prices in that range are likely to rise.
That means you could sell your current home at a premium — and at the same time, properties above the caps may not see the same demand surge, so price growth there may be slower.
This could shrink the gap between what you own now and the upgrade you want. For existing home owners, this could be one of the biggest hidden opportunities of the 2025 changes.
The government schemes are expected to bring more buyers to the market. (Source: AAP)
What’s the catch?
It’s worth noting these schemes don’t magically make your mortgage repayments easier. A 5 per cent deposit may get you in the door, but your loan will then be higher, repayments are real, and the lifestyle trade offs will matter.
Buyers also need to look closely at the shared equity option.
Having the government co-own a chunk of your property does cut your costs significantly at the start, but you’ll eventually need to buy back that share, or split the proceeds when you sell.
So to put it clearly, the schemes reduce the barriers to entry - but they don’t remove the responsibility of owning a large debt.
Why getting in early matters
The biggest shift here isn’t just mindset - it’s practical.
With no income caps, more properties included, and more people able to access these schemes, there will be more buyers in the market.
And many of them will be higher income earners who can comfortably service bigger loans.
When you layer this on top of Australia's ongoing housing supply shortage, the result is predictable — more demand chasing the same number of properties, putting upward pressure on property values, particularly those inside the caps for these new schemes.
For first time buyers, waiting could mean competing in a hotter market where today’s prices look cheap in hindsight.
For upgraders, being smart with your timing could mean the difference between trading up within reach, or being priced out.
The wrap
From 1 October 2025, the barriers to home ownership are lower than they’ve been in years.
For buyers with a 5 per cent deposit, these schemes can take what once felt like an impossible goal and make it achievable.
For existing owners, they create a rare opportunity to upgrade more easily.
But the schemes won’t hold the market steady.
If anything, they’re likely to add more fuel to already tight conditions. The people that benefit the most will be the ones who plan smart, move early, and manage their risks effectively.
While government schemes can smooth the path to the front door, it’s still up to you to make sure the commitment you take on is one you can live with.
Ben Nash is a finance expert commentator, podcaster, financial adviser and founder of Pivot Wealth. Ben’s new book, Virgin Millionaire; the step-by-step guide to your first million and beyond is out now on Amazon | Audiobook.
If you want some help with your money and investing, you can book a call with Pivot Wealth here.
Disclaimer: The information contained in this article is general in nature and does not take into account your personal objectives, financial situation or needs. Therefore, you should consider whether the information is appropriate to your circumstances before acting on it, and where appropriate, seek professional advice from a finance professional.
