New rules will help more teachers buy sooner, but affordability challenges endure
With the expansion of the Home Guarantee Scheme (HGS) taking effect from 1 October, Teachers Mutual Bank Limited (TMBL) has crunched the numbers for Australia’s 320,000-strong cohort of teachers.
Like all Australian professionals, it can be nigh on impossible for teachers to amass a 20% deposit, particularly when house prices continue to soar to unprecedented highs.
According to TMBL, teachers spend anywhere from four years to more than 15 years trying to accrue enough cash to get onto the property ladder.
The standard base salary for a graduate teacher currently stands at $90,177, with a 3% increase to $92,882 due in September 2026, per the New South Wales Industrial Relations Commission.
With the average national first-home buyers loan size well in excess of $550,000 and home loan deposits increasing by more than 50% since 2020, it’s clear the scales are tipped against them.
However, the government’s HGS can significantly shorten the time required to save for a deposit.
Through the HGS, which enables first-home buyers to obtain a mortgage with just a 5% deposit, teachers earning an average salary could be on the property ladder in less than four years – or in as little as 19 months.
Of course, the timeline varies depending on the state and the median dwelling price.
In Sydney, where the average teacher salary is $105,000 – but median house prices exceed $1.2 million – a teacher saving 15% of their annual income could secure a deposit under the HGS in three years and ten months.
In Darwin, the timeframe drops to just one year and seven months, while in Brisbane’s booming property market, it’s slightly over three years.
Credit: Teachers Mutual Bank Limited (TMBL)
But the HGS in its current form has some severe limitations that have made it unfit for purpose.
In Sydney, the current HGS house price cap is $900,000, far below the city’s average house price. The situation is even more dire in Brisbane, where the current house price cap stands at just $700,000.
Read more: Million-dollar Brisbane is buckling under its own success
Furthermore, income caps are currently $125,000 for singles and $200,000 for joint applications. Since 2023, an annual quota of 35,000 HGS applicants has been in place.
But these restrictions will soon be tossed out the window.
Home Guarantee Scheme overhaul approaches
From 1 October, property price thresholds will be dramatically scaled up, while income restrictions and annual quotas will be scrapped entirely.
Though these changes have proved divisive, they will effectively allow every teacher in the country to secure a mortgage with just 5%.
“Our data shows the scheme has proved popular with teachers, and in the 12 months to June 2025, 60% of our first-home buying members accessed it as a way to get a foothold in the market sooner,” said TMBL chief customer officer Greg Johnson.
From 1 October, this demand is expected to surge even further, but substantial challenges will remain.
“In most areas around Australia, and particularly the east coast markets, coming up with a minimum 5% deposit is still a huge task, requiring strict savings habits despite the cost-of-living crunch which we know disproportionately affects younger Australians.”
Furthermore, critics of the HGS expansion argue that it will put even more upward pressure on house prices, partially offsetting the benefits of the 5% deposit.
Understanding teachers' needs
While the HGS doesn't differentiate between different professions, Johnson said brokers need to consider the policies of different lenders when guiding teachers through the application process.
“At Teachers Mutual Bank, we understand the nuances of the teaching profession and our credit policy is designed with teachers in mind. For example, our policy makes specific allowances for patterns of employment within the education sector – such as casual and relief teaching - as well as the composition and timing of salary," he said.
“Brokers can arrange finance for teachers with us, confident that as a bank established by teachers, for teachers we understand their specific circumstances."
