A Guide to the Home Guarantee Scheme and its expansion from 1 October 2025

What is a Guarantee?

In the context of the Home Guarantee Scheme, a guarantee is support provided by the Australian Government (through Housing Australia) to an approved lender. It does not mean the government gives money to buyers directly. Instead, Housing Australia guarantees part of the loan to the lender.

This means eligible buyers can purchase a home with a smaller deposit—without paying costly Lenders Mortgage Insurance (LMI). If a borrower defaults on their home loan, the guarantee covers the lender for the agreed shortfall, up to the scheme’s limits.


The Home Guarantee Scheme

The Home Guarantee Scheme can be used for the purchase of most residential property types including established homes (houses, units or townhouses), off-the-plan properties, vacant land with a house-and-land package

Under the scheme, eligible buyers may be able to borrow up to 95% of the property’s value, or 98% in some circumstances depending on the guarantee type.

Normally, banks require a 20% deposit for home buyers to avoid the considerable cost of LMI. With the Home Guarantee Scheme, buyers may be able to purchase with as little as 2%–5% deposit.


Changes from 1 October 2025

From 1 October 2025, the Australian Government will expand the Home Guarantee Scheme to help more Australians enter the property market sooner, with no limits on the number of places available in the scheme, removal of the income thresholds, and significantly increasing the property value caps.


Types of Guarantees from 1 October 2025

Who is Eligible?

To qualify, applicants must meet a range of criteria, including (but not limited to):

• Be at least 18 years old;
• Be an Australian citizen or permanent resident;
• Have at least 5% of the purchase price saved (or 2% for the Family Home Guarantee);
• Be purchasing a home to live in (not as an investment);
• Property price to be no greater than the price limit.

Buyers can check their eligibility using Housing Australia’s online tool: Eligibility Tool.


How to Apply

Applications cannot be made directly to Housing Australia. Instead, buyers must go through a participating lender.

1. Meet with a lender – Discuss eligibility and compare the guarantees available. Full list: Participating Lenders.
2. Reserve a place – If eligible, the lender applies on the buyer’s behalf. A place is held for 14 days.
3. Find a property – Buyers then have 90 days to sign a Contract of Sale. Price caps apply depending on the property’s location. Housing Australia provides a postcode search tool to check the relevant limits.
4. Settlement and beyond – Even after settlement, buyers must continue to meet the scheme’s requirements (such as the requirement to move into the property within 6 months of settlement (or occupancy certificate for new builds) and reside there while the guarantee is active). If they no longer qualify, the guarantee may no longer apply.
   
   

Key Takeaway

The expansion of the Home Guarantee Scheme from 1 October 2025 will give more Australians the chance to buy sooner with a smaller deposit and without paying LMI. However, eligibility rules and property price caps still apply, so professional advice from a mortgage broker, lender, or legal adviser is highly recommended before proceeding.

Jye Fitzgerald

Jye is a legal advisor at Lawlab with prior experience assisting in areas of conveyancing, wills, traffic law & family law. Jye has been dancing since he was six and is formally trained in ballet, contemporary, jazz and tap. His early introduction to dance led him to completing full time training, earning a Certificate IV in Elite Performance and a Diploma of Dance before moving overseas to train and work within the contemporary dance industry. Jye’s background and passion for the creative arts means that he is dedicated to fostering an inclusive and collaborative environment. Outside of work, he enjoys cooking, travelling & good tunes – ideally all of the above at the same time.