All You Need to Know About the First Home Guarantee Scheme

From 1 October 2025, the scheme expanded to make it easier for more people to qualify. The key changes are:

• Unlimited places, so buyers no longer compete for a set number of spots.
• Removal of income caps, opening the scheme to higher earners.
• Higher property price caps to match today’s housing costs.
• Regional access simplified, with the regional guarantee now folded into the First Home Guarantee.

For Western Australia, the updated property caps are $850,000 for Perth and metropolitan areas, and $600,000 for the rest of the state. These figures were confirmed by Housing Australia and apply to contracts signed on or after 1 October 2025. Contracts signed earlier must still follow the previous lower caps.

The mechanics are simple. You provide at least 5% of the property price from your own savings. Housing Australia then guarantees up to 15% of the property’s value to the lender. This means the lender treats your loan as though you had a 20% deposit.

The guarantee protects the lender, not you. It is not cash in your pocket and does not replace standard loan checks. You still need to cover settlement costs and meet lender serviceability rules. The home must be owner-occupied and within the local price cap.

Your participating lender manages the process by checking eligibility, reserving a place, and finalising your application.

Eligibility comes down to meeting both national rules and local price caps. While the scheme is broader from October 2025, you still need to satisfy some clear requirements.

General National Eligibility Criteria

• You must be an Australian citizen or permanent resident aged 18 or over.
• You need at least 5% deposit saved, but less than 20%.
• You must be a genuine first home buyer or not have owned property in Australia in the past 10 years.
• You must live in the property as your main residence.
• You can only apply through a participating lender.
• Until 30 September 2025, income caps apply ($125,000 for singles, $200,000 for couples). From 1 October 2025, these caps are gone.

Types of Properties You Can Buy

The scheme supports a wide range of property types, provided they fall under the price cap:

• Existing homes such as houses, apartments, or townhouses.
• New builds, including house-and-land packages, off-the-plan purchases, or land with a separate build contract.
• Only owner-occupied properties qualify, you cannot use the scheme for an investment.

Lenders and Housing Australia confirm whether your chosen property is eligible.

Price caps are one of the most important rules. They set the maximum purchase price you can pay while still qualifying for the scheme.

National Price Cap Overview

Caps are set by region and are designed to reflect local housing markets. Before October 2025, limits were strict and excluded many homes in larger cities. With the new changes:

• Property caps have increased across Australia.
• Income caps have been removed.
• Places are no longer capped, so eligible buyers are not turned away.

Western Australia Caps: Perth vs Regional WA

From 1 October 2025:

• Perth and metro WA: $850,000.
• Regional WA: $600,000.

Before that date, lower caps of $600,000 in Perth and $450,000 in regional WA applied. The updated caps mean buyers can now consider a much wider choice of homes.

How Price Caps Affect Your Choice of Property

Price caps influence suburb options, property type, and financing approach. In Perth, the higher $850,000 limit opens up suburbs that were previously unaffordable under the scheme. In regional WA, most new builds and house-and-land packages fall under the $600,000 cap, although premium coastal areas may still sit above it.

If your property is over the cap, even slightly, you cannot use the scheme. Timing also matters: buyers close to purchase may consider whether it makes sense to wait until the higher caps apply.

The scheme doesn’t just let you buy sooner, it also saves you money!

Avoiding LMI and Typical Costs

Without the scheme, buyers with less than 20% deposit usually pay Lenders Mortgage Insurance. LMI protects the lender and can add up to tens of thousands of dollars. On a $600,000 property, LMI could cost $10,000 to $20,000 depending on the lender. Under the guarantee, LMI is not charged.

State Costs in WA

WA buyers may also save through:

• The $10,000 First Home Owner Grant (for new builds or newly built homes).
• Stamp duty concessions for eligible first home buyers.
• Concessions that may apply in certain developments or through Keystart loans.

Case Study: Perth Buyer with 5% Deposit

Take an $800,000 home in Perth under the new $850,000 cap.

• Deposit: $40,000 (5%).
• Without the scheme: $160,000 deposit needed, plus LMI costs of $15,000–$20,000 if you bought with less.
• With the scheme: $40,000 deposit, no LMI, and potential $10,000 FHOG plus reduced stamp duty.

The savings make it possible to buy a home sooner, without needing to wait years to build up a larger deposit.

Applying for the scheme is straightforward if you know the steps.

Finding a Participating Lender

You cannot apply directly to Housing Australia. You must go through a participating lender. Housing Australia provides a list of approved lenders, which includes many major banks as well as smaller credit unions. A mortgage broker can also help match you with a lender.

Documents, Process, Timelines

You will need:

• Proof of identity
• Evidence of savings
• Income records such as payslips or tax returns
• Property contract once you have one

The lender reserves a place under the scheme, checks your serviceability, and provides conditional approval. Settlement follows normal timelines, usually within 30–90 days.

Combining with WA Grants and Schemes

The scheme works alongside WA’s First Home Owner Grant and stamp duty concessions. You cannot combine it with Keystart on the same loan, but comparing both options helps you decide what is best for your situation.

While the scheme has clear benefits, buyers need to understand the risks.

Risks of Higher Debt and Interest Rates

With a 5% deposit, you borrow up to 95% of the property’s value. That means:

• Higher repayments each month
• More interest paid over the life of the loan
• Greater sensitivity to interest rate rises

WA Property Market Limits

• Property price caps still apply, and some areas remain out of reach.
• Increased demand for homes under the cap could push up competition.
• Regional buyers may face fewer options and longer build times.

What Happens if Values Change or Repayments Slip

• If property prices fall, you may owe more than the home is worth.
• If you can’t meet repayments, the lender can take action. The guarantee protects the lender, not you.
• Switching the property to an investment too soon can breach scheme rules.

Planning for a buffer and seeking financial advice is wise before committing. The team at Redink Homes can help with finance-related questions, meaning that you can get your house, land and finance all sorted at once.

Buying your first home is a major milestone. With the First Home Guarantee, you may be able to take that step much sooner. At Redink Homes, we help Western Australians secure finance and choose a design or house-and-land package that fits within the scheme’s rules.

Our team understands the WA market and the requirements of the scheme. Whether you want a home in Perth or the South West, we can guide you through the process, show you where the savings are, and help you move forward with confidence.

Contact Redink Homes today to see which of our homes fit the First Home Guarantee and start planning your future.