Home Guarantee Scheme to go live on 1 October – three months ahead of schedule
The Anthony Albanese (pictured) government is bringing forward the start date of its landmark 5% deposit homebuyer scheme to October 1 – three months earlier than planned – in order to get more first-home buyers into the property market sooner.
As part of the broader expansion of the Home Guarantee Scheme (HGS), the government is also lifting price caps – to up to $1.5 million in Sydney – and removing income thresholds, allowing an estimated 70,000 households per year to benefit from the low-deposit initiative.
The changes are designed to remove one of the biggest barriers to homeownership: the deposit hurdle.
In a move welcomed by the Customer Owned Banking Association (COBA), the government has also instructed Housing Australia to promote greater diversity among lenders participating in the HGS.
The shift could see dozens more mutual banks and credit unions added to the lender panel.
“Our sector has a long-standing commitment to first-home buyers,” said COBA chief executive Michael Lawrence. “Customer-owned banks serve an incredibly diverse range of communities with tailored solutions.
“More customer-owned banks on the HGS panel will create a more dynamic, inclusive, and competitive market. Ultimately, this increased competition and choice will benefit first-home buyers.”
Currently, more than half of customer-owned institutions – 29 banks and credit unions – are excluded from the HGS lender panel. Yet the sector collectively serves over 5.4 million Australians, many of them in regional and outer suburban areas where affordability challenges are especially acute.
A strategic boost for mortgage brokers
The influx of mutuals into the panel will increase choice and enable brokers to match clients with lenders that offer more tailored, community-based services – particularly valuable for borrowers who fall outside the “vanilla” profiles preferred by the majors.
Some customer-owned banks specialise in lending to frontline workers like teachers, nurses, and police officers, many of whom struggle to buy homes in the communities they serve.
Others are regionally headquartered, in towns like Toowoomba, Broken Hill, and Albury, making them well-placed to serve buyers in rural and regional areas targeted by the Regional First Home Buyer Guarantee.
Lawrence highlighted the significance of this expansion for brokers and borrowers alike.
“In a banking landscape dominated by a few major players, the one-size-fits-all approach often fails to meet the diverse and nuanced financial needs of communities,” he said. “Customer-owned banks offer a distinct alternative with a genuine commitment to people, not profits.”
Under the revised HGS:
- Eligible buyers can purchase homes with a 5% deposit (or 2% for single parents).
- Income caps have been removed entirely
- Property price caps have increased to $1.5 million in Sydney, $950,000 in Melbourne, and $1 million in Brisbane and the ACT
- Stamp duty savings and Lender’s Mortgage Insurance waivers can result in up to $34,000 in cost reductions for some buyers
- The scheme is now uncapped, allowing for more participants throughout the year
Housing Minister Clare O’Neil said the scheme was part of a two-pronged strategy: increasing the housing supply and making homeownership more accessible.
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“It’s just not right that an entire generation of young Australians have been locked out of the housing market – saving for decades while paying off someone else’s mortgage. So Labor’s changing it,” O’Neil said. “This will level the playing field and help renters transition into homeownership faster.”
