The Federal Government has just announced that the expanded Home Guarantee Scheme will start three months earlier than planned — now on 1 October.
This is huge news for first home buyers because it means:
- You can get into the market with just a 5% deposit
- You’ll pay no Lenders Mortgage Insurance (LMI) — saving you tens of thousands
- There are no income caps
- Property price caps have been lifted to reflect today’s market conditions
The Government estimates this scheme will save first home buyers around $1.5 billion in LMI costs in the first year alone, while cutting years off the time it takes to save a deposit.
What does this mean for Melbourne buyers?
Here in Victoria, the property price caps under the First Home Guarantee are now more realistic in today’s market.
- In Melbourne and Geelong, the new price cap will be $900,000 (up from $800,000).
- Across the rest of Victoria, the cap will be $750,000.
This is a big win because many buyers in Melbourne were being priced out of the old scheme, property values have risen, and the old caps didn’t reflect what’s actually happening on the ground.
For example:
- A first home buyer purchasing an $850,000 townhouse in Melbourne would have previously been excluded from the scheme.
- From October, that property would qualify, allowing the buyer to use just a 5% deposit ($42,500) and skip LMI (which could otherwise add $25,000+ in costs).
That’s a massive difference and a genuine opportunity for buyers who thought they were locked out.
Why this matters now
The average age of first home buyers in capital cities is creeping up towards 40. Many feel like they’ll be renting forever while paying off someone else’s mortgage. This scheme changes the equation.
But there’s a flip side: industry leaders are already warning that this may increase competition, which could push prices higher in some pockets. That makes it even more important to be organised early.
Your First Step: For anyone thinking, “This sounds great, but what does it mean for me?”, the first step is simple: sit down with a broker.
Here’s why:
- We’ll look at your income, expenses, and savings
- Show you how much you can borrow under the scheme
- Establish a realistic price range for your first home
- Put together a plan, even if you’re not quite ready yet
It costs nothing to have the conversation, and it might just give you the motivation you need to get your finances in order. Sometimes, buyers are closer to their goal than they realise.
The early rollout of the 5% deposit scheme is fantastic news for Melbourne first home buyers. With higher price caps, no income limits, and the removal of LMI, it’s never been a better time to explore your options.
If you’re wondering what deposit you need, what you can afford, or how far away you really are from buying your first home, reach out today. We’d love to help you run the numbers and put you on the path to home ownership.
Because the sooner you know your price range, the sooner you can make the dream of owning your first home a reality.
Josh Bartlett – Director of Mynt Financial (Book a quick time to chat here)
Disclaimer: The information in this article is general in nature and does not take into account your personal circumstances. Lending criteria and eligibility for government schemes may vary. Please speak with a licensed mortgage broker or financial adviser before making any decisions.
