First Home Guarantee Just Changed! What You Need to Know (2025)

Do the new changes to the First Home Guarantee mean it’s easier to buy property in 2025?

I’m Tony Xia, the Founder and Director of The Mortgage Agency, one of Sydney’s leading mortgage broker firms.

In this episode of The Mortgage Chat, I explain the proposed updates to the First Home Guarantee, and how they might help (or hurt) first-time buyers in Australia. From joint purchases with friends or family, to key risks you should watch for—this is a must-watch if you’re entering the property market.

Here’s what you’ll learn in this episode:

✅ What’s changing in the First Home Guarantee
✅ Who can now buy with you (hint: not just partners)
✅ What the banks will look at in joint applications
✅ Key risks of buying with family or mates
✅ My honest take on these proposed updates

Thinking of buying your first home and need expert guidance?

👉 Contact The Mortgage Agency for a free consultation today.
Our experienced mortgage brokers are here to help you make smart, confident decisions.

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Tony Xia | The Mortgage Agency
📞 0423 718 612
📩 Tony@themortgageagency.com.au

YouTube Chapters:

0:00 Introduction  
0:25 What is the First Home Guarantee?  
1:02 Why is the First Home Guarantee important?  
1:45 What’s changing in the First Home Guarantee scheme?  
2:27 Can friends or siblings now buy a home together under the scheme?  
3:06 Who benefits most from these changes?  
4:20 Does this help with housing affordability?  
5:18 Is the First Home Guarantee better than a 5% deposit home loan?  
6:12 Should you apply for the scheme before the changes take effect?  
7:03 Final thoughts


#mortgagebrokerpodcastaustralia #TonyXia #TheMortgageAgency #mortgagebroker #mortgageloan #mortgageadvice

Transcript

0:00

SO THE BIGGEST PROBLEM WE'VE HAD SINCE COVID COVID 2020 WAS BECAUSE HOUSE PRICES HAS JUST GROWN TOO FAST IN COMPARISON TO WHAT THE REAL WAGE GROWTH WAS SO EVERYBODY I'M VERY EXCITED FOR YOU FIRST HOME BUYERS FOR THIS NEW POLICY TO BE INTRODUCED BY THE LABOUR GOVERNMENT BECAUSE I THINK INCREASING THE CAP FROM 900 TO 1.5 MIL ACTUALLY OPENS UP AN ARRAY OF ASSETS AND PROPERTIES YOU CAN POTENTIALLY BUY LET'S SEE WHAT THE NEW GOVERNMENT AND THE NEW POLICY HAS IMPLEMENTED AND WHAT CHANGES THERE ARE FOR YOU FIRST HOME BUYERS OUT THERE OKAY EVERYBODY LABOR JUST GOT REELECTED AND LET'S SEE WHAT THIS MEANS FOR YOU FIRST TIME BUYERS I'M YOUR HOST TONY SHAH AND THANKS FOR JOINING ME ON ANOTHER EPISODE OF THE MORTGAGE CHAT AND TODAY I WANNA TALK ABOUT THE FIRST HOME GUARANTEE MORE SPECIFICALLY FOR NEW SOUTH WALES SYDNEY HOME BUYERS RIGHT SO FOR FIRST HOME BUYERS LET'S SEE WHAT THE NEW GOVERNMENT AND THE NEW POLICY HAS IMPLEMENTED AND WHAT CHANGES THERE ARE FOR YOU FIRST HOME BUYERS OUT THERE SO THE BIGGEST PROBLEM WE'VE HAD SINCE COVID 2020 WAS BECAUSE HOUSE PRICES HAS JUST GROWN TOO FAST IN COMPARISON TO WHAT THE REAL WAGE GROWTH WAS SO HOUSE PRICES AROUND SYDNEY HAS GROWN MAYBE 25 30 40% IN SOME AREAS BUT YOUR WAGE GROWTH HAS NOT GROWN THE SAME PERCENTAGE AS HOUSE PRICE GROWTH SO THERE WAS ALWAYS GONNA BE THAT MASSIVE GAP IN SAVINGS IN AFFORDABILITY RIGHT BUT YES WE ALSO HAD A COST OF LIVING PROBLEM RIGHT BECAUSE INFLATION WAS JUST THROUGH THE ROOF BUT A SMALL PART OF ME STILL BELIEVE THERE WAS A COST OF SPENDING PROBLEM WHERE FIRST HOME MILLENNIALS WERE ON HIGH WAGES AND THEY WERE JUST GOING OUT THERE SPLURGING THE MONEY LIKE NO TOMORROW OK SO THAT'S THE STORY IN TOPIC FOR ANOTHER DAY TODAY LET'S JUST TALK ABOUT THE FIRST HOME GUARANTEE WHERE THE GOVERNMENT SUPPORTS YOUR LOAN WHERE YOU ONLY NEED 5% DEPOSIT AND THE GOVERNMENT GUARANTEES YOU THE OTHER 15% SO YOU DON'T HAVE TO PAY ANY LENDER'S MORTGAGE INSURANCE SO LET'S BREAK DOWN THE NEW PROPOSED CHANGES BY THE LABOUR GOVERNMENT THROUGH THIS SCHEME SO LET'S TALK ABOUT THE SCHEME WHAT THE CURRENT SCHEME IS AND WHAT THE PROPOSED SCHEME CHANGES ARE GONNA BE OKAY SO RIGHT NOW FOR NEW SOUTH WALES SYDNEY FOR MAJOR CITIES THE CAP ON USING THIS SCHEME THE PURCHASE PRICE HAS TO BE NO HIGHER THAN $900,000 AND THE INCOME IS EITHER GONNA BE 1 25 AS A SINGLE APPLICANT OR $200,000 COMBINED AS A COUPLE ALRIGHT SO WHAT THE NEW CHANGES ARE GONNA BE IS THEY WANNA INCREASE THAT 900,000 TO 1.5 MIL AND ALSO THERE'S NO INCOME THRESHOLD RIGHT BECAUSE MATE TO GET A LOAN FOR 1.5 MIL YOU NEED MORE THAN $200,000 SO THOSE ARE THE NEW PROPOSED CHANGES WHICH WILL HELP OUT A LOT OF FIRST TIME BUYERS ESPECIALLY IN SYDNEY AND I LOVE HOW THE GOVERNMENT HAS INCREASED THIS FRESH UP BECAUSE FOR 900,000 FIRST TIME BUYERS THERE'S VERY LIMITED PROPERTIES THEY CAN BUY A LOT OF THESE FIRST TIME BUYERS WANNA ACTUALLY BUY A HOUSE RIGHT SO YOU KNOW FOR A HOUSE THESE DAYS IN SYDNEY THE AVERAGE HOUSE PRICES IS AROUND 1.6 MIL SO FOR 900,000 THERE'S NOT MUCH YOU CAN BUY UNLESS YOU GO YOU KNOW OUT WEST A LITTLE BIT BUT FOR FIRST TIME BUYERS THAT'S WORKING IN THE CITY FOR 900,000 MORE THAN LIKELY CAN THEY CAN ONLY BUY A 1 2 BEDROOM APARTMENT CLOSER TO THE CITY WITH THE NEW FRESH OUT OF 1.5 MIL IT OPENS THE DOOR UP FOR THEM A LOT MORE OKAY SO THEY CAN START BUYING YOU KNOW VILLAS TOWNHOUSES CLOSER TO THE CITY OR THEY CAN POTENTIALLY BUY A HOUSE FOR 1.5 MIL WHICH OPENS UP A LOT OF MORE AREAS FOR THEM TO PURCHASE IN AND I'M VERY HAPPY THAT THE LABOUR GOVERNMENT HAS ACTUALLY INCREASED THE THRESHOLD FROM 900,000 TO 1.5 MIL AND ALSO CHANGING THE INCOME RIGHT BECAUSE WHEN THE CAP WAS UNDER 900,000 UNLIMITED FIRST TIME BUYERS ON WHAT THEY CAN PURCHASE IN SYDNEY RIGHT SO TO PURCHASE A HOUSE IN SYDNEY YOU'RE VERY LIMITED UM TO WHAT YOU CAN BUY BECAUSE YOU HAVE TO BUY VERY OUT WEST OR UM YOU CAN ONLY BUY A TOWNHOUSE OR A VILLA OR AN APARTMENT RIGHT SO FOR FIRST TIME BUYERS ACTUALLY WANT TO BUY A HOUSE CLOSER TO THE CITY IF POSSIBLE BUT WITH A 900,000 DOLLAR BUDGET IF THEY WANT TO LIVE CLOSER TO THE CITY YOU CAN ONLY BUY AN APARTMENT AND BECAUSE THEY WORK IN THE CITY AND THEY WANT TO LIVE CLOSER TO THE CITY BUYING A HOUSE FOR 900,000 IS JUST TOO HARD SO EVEN IF YOU WANT TO BUY SOMETHING IN THE NORTHWEST AREA IT'S STILL GONNA BE AROUND $1.2345 MILLION RIGHT SO YOU KNOW ANYTHING AROUND 900,000 TOP OF MY HEAD YOU HAVE TO BUY IN PENRITH AREA OR MAYBE EVEN BLACKTOWN AREA IF YOU'RE LUCKY NOW I'M NOT SAYING BLACKTOWN PENRITH IS A BAD PLACE OK I GOT FAMILY THAT LIVES THERE BUT I WAS JUST USING THAT AS EXAMPLE SO DON'T SHOOT ME ALRIGHT NOW WITH THIS $1.5 MILLION IT ACTUALLY OPENS UP THE DOOR A LOT MORE RIGHT SO FIRST TIME BUYERS DON'T HAVE TO BUY AN APARTMENT CLOSE TO THE CITY THEY CAN PROBABLY CONSIDER BUYING A TOWNHOUSE A VILLA THAT'S CLOSE TO THE CITY OR THEY CAN START BUYING A HOUSE THAT'S IN YOU KNOW SOUTHWEST NORTHWEST OR EVEN THE BLACKTOWN PENRITH AREA RIGHT A BIGGER HOUSE SO IT GIVES THEM A LOT MORE OPPORTUNITIES TO PURCHASE SOMETHING FOR 1.5 MIL DOWN THE TRACK IT OPENS UP THE AREA A LOT MORE AND IT OPENS UP THE TYPE OF PROPERTY YOU WANNA BUY AS WELL RIGHT SO YOU KNOW THEY'RE NOT REALLY LIMITED IN BUYING AN AREA THAT THEY DON'T WANNA BUY IN CAUSE YOU KNOW 900,000 DOESN'T ALLOW YOU TO BUY IN A LOT OF PLACES FOR A HOUSE OKAY SO I'M HAPPY THAT THE CAP HAS INCREASED FROM 900 TO 1.5 MIL SO WHAT DOES THIS MEAN FOR FIRST TIME BUYERS AND HOW THEY CAN BUY SOMETHING FOR 1.5 MIL AND LET'S BREAK IT DOWN THE FIRST TWO THINGS YOU HAVE TO UNDERSTAND IS BORROWING POWER AND DEPOSIT WHAT INCOME YOU NEED TO GET A BORROWING POWER TO BUY SOMETHING FOR 1.5 MIL AND WHAT SORT OF DEPOSIT YOU NEED TO BUY SOMETHING FOR 1.5 MIL LET'S BREAK THAT DOWN RIGHT NOW SO FIRST LET'S WORK OUT WHAT YOUR BORROWING POWER IS RIGHT SO IF YOU BUY SOMETHING FOR 1.5 MIL AND YOU HAVE 5% DEPOSIT THE LOAN YOU'RE GONNA GET IS $1.425 MILLION WHICH IS 95% OF THE PURCHASE PRICE NOW TO GET A LOAN FOR THAT AMOUNT IN TODAY'S MARKET WHICH IS UM MAY 2025 AND JUST BEFORE THE RATE CUT AS WELL OKAY WHAT INCOME DO YOU NEED TO OBTAIN THIS LOAN ALRIGHT SO LET'S SAY YOU'RE A COUPLE YOU HAVE NO DEPENDENTS YOU HAVE NO HEX NO OTHER DEBTS BUT YOU HAVE A 10,000 DOLLAR CREDIT CARD AND I USE 10,000 DOLLAR CREDIT CARD BECAUSE A LOT OF PEOPLE HAVE CREDIT CARDS OUT THERE THESE DAYS YOU KNOW THEY DON'T HAVE A LOT OF CREDIT CARD DEBT SOME DO BUT A LOT OF PEOPLE USE CREDIT CARDS FOR THE POINTS RIGHT SO THEY PAY FOR ALL THE EXPENSES WITH THE CREDIT CARD BUT THEY PAY IT OFF AT THE END OF THE MONTH TO RACK UP THE POINTS FOR YOU KNOW THEY CAN GET GIFT CARDS OR GO ON HOLIDAYS WITH THE QUANTAS POINTS WHATEVER YOU WANNA CALL IT OKAY SO FOR THIS EXAMPLE I PURELY ONLY USED $10,000 CREDIT CARD LIMIT IN THE CALCULATIONS AS A LIABILITY NOW WHAT INCOME AS A COUPLE DO THEY NEED TO GET THIS LOAN FOR $1.425 MILLION AND THE ANSWER IS AROUND $145,000 EACH OK SO SO IT'S HIGHER THAN THE AVERAGE WAGES OUT THERE BUT YOU KNOW THERE IS SOME PEOPLE OUT THERE THAT'S A COUPLE THAT'S ON BETWEEN YOU KNOW HUNDRED AND TWENTY TO A HUNDRED AND SIXTY THOUSAND DOLLARS IF ESPECIALLY IF THEY'RE WORKING CORPORATE OR YOU KNOW EVEN IF YOU'RE A TRADESMAN UM EARNING A LOT OF OVERTIME YOU'RE ON THAT MONEY ANYWAY ALRIGHT SO YES THAT IS THE INCOME YOU NEED TO GET A LOAN FOR 95% OF 1.5 MILLION DOLLARS WITH A 10 THOUSAND DOLLAR CREDIT CARD LIMIT NOW IF YOU DON'T HAVE A CREDIT CARD LIMIT JUST REMEMBER AS A RULE OF THUMB EVERY THOUSAND DOLLAR CREDIT CARD LIMIT YOU HAVE THAT WILL DECREASE YOUR BORROWING POWER BY ABOUT FOUR TO FOUR AND A HALF THOUSAND DOLLARS OKAY SO YOU KNOW IF THEY CLOSE OFF THAT TEN THOUSAND DOLLAR CREDIT CARD THEY CAN PROBABLY GET AN EXTRA BORROWING POWER OF BETWEEN 40 AND 45 THOUSAND DOLLARS AND ANOTHER THING IS EVERY TIME THERE'S GONNA BE A 0.25% RATE CUT YOUR BORROWING POWER WILL PROBABLY INCREASE BY AROUND 2% OKAY SO NOT A WHOLE LOT BUT IT'S GONNA HELP YOU A LITTLE BIT ANYWAY ALRIGHT SO THOSE ARE THE TWO THINGS THAT YOU CAN PROBABLY CONSIDER WHEN YOU'RE LOOKING FOR YOUR FIRST HOME LOAN OKAY ESPECIALLY WHEN THINGS CHANGE THE MARKET CHANGE RBA CHANGES RATE DECREASES RATE ETCETERA OKAY SO AS A RULE OF THUMB OKAY RIGHT NOW YOU CAN PROBABLY BORROW AROUND 4.7 TO 5 TIMES YOUR INCOME FOR OWNER OCCUPIED PROPERTY IF YOU HAVE NO DEBTS OR IN THIS CASE 10 GRAND CREDIT CARD OKAY OKAY EVERYONE SO NOW LET'S TALK ABOUT WHAT DEPOSIT YOU NEED TO PURCHASE SOMETHING FOR 1.5 MIL OKAY SO THE FIRST THING YOU NEED IS THE 5% DEPOSIT RIGHT WHICH IS 75,000 SO THIS COULD BE A MIXTURE OF SAVINGS OR USING THE FIRST HOME SUPER SAVER SCHEME OKAY NOW BECAUSE IT'S 1.5 MIL THE GOVERNMENT HAS TO MAKE MONEY SOMEWHERE OKAY YOU NEED 65 G'S ON STAMP DUTY THEN ANOTHER TWO AND A HALF THOUSAND DOLLARS FOR SOLICITOR COST OKAY LOOK IT COULD BE 18 TWO AND A HALF THOUSAND THREE THOUSAND I DON'T KNOW I'M JUST USING TWO AND A HALF THOUSAND AS AN EXAMPLE AND ANOTHER $500 FOR CHANGE OVER COST SO WHAT I MEAN BY THIS IS UM YOU KNOW WHEN YOU SETTLE ON A PROPERTY YOU HAVE TO PAY THE PRE RATED UM COUNCIL RATES WATER RATES STRATA WHATEVER YOU WANNA CALL IT OKAY SO YOU NEED A TOTAL OF AROUND $145,000 TO BUY SOMETHING FOR $1.5 MILLION ALRIGHT SO EVERYBODY 143,000 IS JUST THE BARE MINIMUM OF WHAT YOU NEED TO PURCHASE SOMETHING FOR 1.5 MIL BUT REMEMBER YOU HAVE TO FINISH THE PLACE UH AND YOU HAVE TO HAVE SOME MONEY FOR A RAINY DAY SO JUST REMEMBER THOSE TWO THINGS SO EVERYBODY THAT'S JUST A BREAKDOWN ON PURCHASING SOMETHING FOR 1.5 MIL UNDER THE NEW PROPOSED FIRST HOME GUARANTEE OKAY SO I SHOWED YOU THE DEPOSIT YOU NEED AND I SHOWED YOU THE INCOME YOU NEED FOR BORROWING POWER PURPOSES ALRIGHT SO I'M VERY EXCITED FOR FIRST HOME BUYERS IN THE COMING FEW MONTHS ONCE THIS NEW POLICY IS IMPLEMENTED OKAY CAUSE I THINK IT WILL OPEN UP A LOT OF DOORS FOR YOU FIRST TIME BUYERS THAT'S JUST STRUGGLING FOR THAT DEPOSIT SO EVERYBODY I'M VERY EXCITED FOR YOU FIRST TIME BUYERS FOR THIS NEW POLICY TO BE INTRODUCED BY THE LABOUR GOVERNMENT CAUSE I THINK INCREASING THE CAP FROM 900 TO 1.5 MIL ACTUALLY OPENS UP AN ARRAY OF ASSETS AND PROPERTIES YOU CAN POTENTIALLY BUY AND NOT JUST STUCK WITH YOU KNOW UH CERTAIN PRICE RANGES OK IN CERTAIN AREAS RIGHT SO I'M VERY EXCITED FOR YOU GUYS I'VE JUST SHOWED YOU WHAT YOU NEED TO DO WITH THE BORROWING POWER AND DEPOSIT YOU NEED FOR 1.5 MIL OK BUT IF YOU DO NEED A RECALCULATION ON A LOWER PURCHASING PRICE THAN A LOWER INCOME PLEASE REACH OUT THE TEAM WILL HELP YOU OUT SO THERE YOU GO I HOPE YOU ENJOY THIS VIDEO I'M VERY EXCITED FOR YOU GUYS PLEASE STAY TUNED PLEASE SUBSCRIBE BECAUSE WE GOT A VERY EXCITING EPISODE TO COME UP IN THE NEXT FEW WEEKS WHICH WILL HELP YOU OUT A LOT AS ALWAYS TAKE CARE AND I'LL SEE YOU NEXT TIME