For first home buyers in Melbourne, there’s an important update to how the Government supports people entering the property market. From 1 October 2025, the Home Guarantee Scheme will be expanded, providing more opportunities for buyers to get into the market with a smaller deposit.
What’s Changing? The updated scheme removes limits on the number of Government guarantees available. That means any Australian first home buyer with a 5% deposit can apply and potentially avoid Lenders Mortgage Insurance (LMI).
Other key updates include:
- No income caps – buyers with higher incomes can now participate.
- Higher property price caps – reflecting rising Melbourne property values, more homes are eligible.
- Simplified eligibility – the Regional First Home Buyer Guarantee will be replaced by the First Home Guarantee, standardising access across Victoria.
These changes make it more straightforward for people to enter the property market.
Things First Home Buyers Should Consider
While a 5% deposit makes it possible to access the scheme, buyers should also consider the overall costs of buying a home, including:
- Application fees
- Legal costs
- Stamp duty
- Conveyancing fees
- Ongoing property expenses
Understanding these costs helps buyers plan effectively and make informed decisions about their first home purchase.
Key Points for Melbourne Buyers
- Deposit Requirements – the scheme allows entry with a 5% deposit, making home ownership more accessible.
- Associated Costs – buyers are responsible for other fees and ongoing property expenses.
- Property Price Caps – higher caps mean more Melbourne homes are eligible.
- Income Eligibility – no income restrictions under the new scheme.
- Application Process – First, check your eligibility using the Home Guarantee Scheme Eligibility Tool (available from 1 October 2025). Then contact a participating lender in Melbourne for application and pre-approval. Once approved, start looking for a property in your preferred suburb.
- Planning Ahead – being aware of costs and eligibility criteria helps buyers make decisions confidently.
How to Apply in Melbourne
- Check your eligibility – review current criteria on the Housing Australia website.
- Contact a participating lender – Melbourne lenders will submit applications to Housing Australia and manage pre-approval.
- Find a property – once approved, search for properties in Melbourne. Explore Melbourne listings to see what’s available.
The updated Home Guarantee Scheme provides more options for first-home buyers in Melbourne. Understanding eligibility and costs helps buyers approach the process with confidence and clarity.
Ready to take the next step? Don't forget to explore off-market transactions as well – by registering as a buyer, you can stay informed about these opportunities.
At Nelson Alexander, our dedicated team of agents is here to support you in achieving your property goals in Melbourne. Reach out to your local office today and let us assist you in finding your first property that perfectly suits your needs.
