First Home Guarantee Scheme Updates — What’s Changing & What It Means

As of 1 October 2025, the Australian Government is introducing major changes to the Home Guarantee (formerly First Home Guarantee) Scheme to make home ownership more accessible. 

​Here’s what you need to know — especially if you’re in the Northern Territory or planning ahead for a first home purchase.

What’s Changing from 1 October 2025

✅ Unlimited Places
Gone are the quota limits. From 1 October, any eligible first home buyer can apply without being restricted by a cap on the number of places. 

✅ Income Caps Removed
The previous income thresholds (for individuals and couples) will no longer apply — more people will now qualify based on other criteria. 

✅ Higher Property Price Caps (Mostly)
The price limits for eligible homes will increase in many parts of Australia to better align with current market conditions. However, for the Northern Territory, the property price cap remains unchanged at $600,000.


How the Scheme Works (Core Principles)

• The Home Guarantee Scheme helps eligible first home buyers purchase a home with as little as a 5% deposit, without needing to pay Lenders Mortgage Insurance (LMI), because the government acts as a guarantor to the lender. 
• It’s not a cash grant—the guarantee protects the lender against a shortfall in case of default up to a certain percentage. 
• You still must satisfy the lender’s usual credit and eligibility criteria (e.g. meet deposit, serviceability, and other requirements).

What This Means for First Home Buyers in the NT

• Even though NT's cap stays at $600,000, the removal of place limits and income caps could open the door for buyers who were previously excluded.
• If your target property in NT falls within that cap, you may now qualify with less stringent income criteria.
• Buyers in NT should check if their property falls under the existing price cap and whether they meet all other eligibility conditions.

The Bottom Line
These changes are designed to make home ownership more achievable — particularly by removing previous restrictions on places and income. While the Northern Territory’s property cap remains unchanged, many buyers who were previously excluded may now have a pathway to purchase. If you’re thinking about buying your first home, now’s the time to start planning.

​At KLM finance, we can walk you through the eligibility, lender criteria, and property price caps to make sure you’re in the strongest position possible.