The changes will see the caps on house prices raised, and more regional and customer-owned lenders added to the scheme’s panel. Photo: ACT Housing.
The Federal Government’s new Home Guarantee Scheme will be expanded to include more customer-owned and regional banks as well as higher house price caps in regional areas.
The expanded scheme is due to commence on 1 October, and will see the government guarantee a portion of a first home buyer’s home loan through a panel of banking organisations and lenders, so they can purchase with a lower deposit and not pay lenders mortgage insurance.
This means first home buyers with a five per cent deposit of the total purchase price will have the balance of the usual 20 per cent deposit that is required in order for lending organisations to finance a first home guaranteed by the government.
Originally planned to be introduced in 2026, the government consulted with the panel before announcing in August that it would bring forward an expansion of the scheme to 1 October.
The initial expansion saw all first home buyers in major and regional cities given access to the scheme, with no caps on places or income limits. Importantly, it also changed property price caps to be set higher in line with average house prices, providing access to a much greater variety of homes.
Now, there will be no caps on the number of regional Australians who can access the scheme, giving additional access for first home buyers outside the major centres. It will also raise the price caps to reflect what it actually costs to buy a home in regional markets, and there will be more choice for customers with more community-owned and regional lenders joining the panel.
The government says, by bringing more lenders onto the panel, it is ensuring benefits don’t just flow to the big banks. It says regional and customer-owned banks will have the backing of a nationally significant program to expand their services.
Minister for Housing, Homeless & Cities Clare O’Neil said the government would back first home buyers in regional Australia all the way.
“We’re not just opening doors for home buyers – we’re opening up real competition in the banking sector,” she said.
“By bringing smaller, community-owned and regional lenders onto the panel, we’re making sure the big banks don’t have all the power. Regional families deserve choice, and regional banks deserve a fair go.
“This expansion means thousands more Australians will get the keys to their first home,” she added.
“We’ve already helped 59,000 regional Australians into home ownership, and now there’s no limit to how many more we can support.”
CEO of the Customer Owned Banking Association Michael Lawrence welcomed the inclusion of more customer-owned banks on Housing Australia’s lending panel.
“Mutual banks and credit unions look forward to offering fair, tailored solutions to diverse communities, and we are committed to working with the government to ensure this initiative truly delivers for consumers – both individually by providing more choice and collectively by creating a more competitive banking landscape.”
The Home Guarantee Scheme is currently available through more than 30 lenders across Australia, including customer-owned and regional banks, and major banks.
First home buyers looking to take advantage of the scheme should first check their eligibility with the Home Guarantee Scheme Eligibility Tool, and research property price caps in their area.
They should then contact a participating lender and apply, after which the lender will submit eligible applications to Housing Australia for pre-approval.
