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For many first homebuyers, saving a deposit feels like the hardest part of the journey. The good news? That hurdle just got a whole lot smaller. The Federal Government has announced it will bring forward its expanded First Home Guarantee by three months, now set to begin this October. What does that mean if you’re dreaming of a place of your own? A smaller deposit, reduced costs and your own home sooner.
Under the Guarantee, first homebuyers can purchase with just 5% deposit. On a $700,000 home, that’s $35,000 compared to $140,000 for a 20% deposit. You’ll also escape the hefty cost of Lenders’ Mortgage Insurance (LMI), which usually requires a 20% deposit to avoid. That’s a potential saving of tens of thousands of dollars – money that could go towards furnishing your home, landscaping or simply making the move easier.
Ranin Mendis, Managing Director of Ello Lending Co, comments, “The scheme helps first home buyers get off the sidelines sooner by reducing the years it takes to save, while avoiding the full cost of traditional pathways.”
Changes to the First Homebuyer Guarantee and what they mean for you
A major change is the removal of income caps, which means more people can now access the scheme. Additionally, property price caps have increased to $950,000 in Melbourne. Mendis explains that “raising these caps broadens eligibility to more properties in growth corridors, which is critical for buyers who were previously priced out despite solid incomes.”
Cutting down the time it takes to save a deposit could also save you thousands in rent. Treasury figures show it takes around nine years to save a 20% deposit* on a $700,000 property. With just 5% deposit*, it could take just two years, potentially saving you around $171,500 in rent**.
At YourLand, we understand that buying a home can be equal parts exciting and overwhelming. Our communities across Melbourne are designed with first homebuyers in mind, offering great locations, thoughtful design and homes that balance affordability with lifestyle. With the Guarantee now within reach for more buyers, your path to ownership could be closer – and more affordable – than you think.
If you’d like more information on finance, reach out to YourLand’s mortgage broking service, Ello Lending Co. Specialists in off-the-plan loans, with access to competitive rates, their personalised service makes it easy to find the perfect loan for your needs.
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*Assuming a first home buyer with an average annual income of $100,000 who saves 15% of their income every year. This is consistent with the assumptions used in the CoreLogic Housing Affordability Report in November 2024. **Estimated by multiplying national house gross rental yield of 3.5% (as reported in Cotality’s Home Value Index release of 1 July 2025) by the value of the property.
Source: Treasury
