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In this week’s episode, the Trio unpack one of the most impactful housing policy changes we’ve seen in years: the expansion of the Home Guarantee Scheme. As of 1 October, eligible first home buyers can now enter the market with just a 5% deposit and without paying Lenders Mortgage Insurance. And the ripple effects are already being felt across the country.

🏡 What’s Changed & Why It Matters 
Mike kicks things off with the big picture: income caps are gone, price caps are up, and the government is backing loans to get first-timers into their homes sooner. Dave explains how removing income limits and lifting price ceilings, (in some cities by hundreds of thousands) effectively signals both first home buyers and investors to jump in before prices move. Cate highlights that even extremely high-income buyers now qualify; a huge shift from the previous capped system.  This policy isn’t subtle. Median-value homes in major cities are suddenly on the table with just a 5% deposit, and the Trio discuss how this is set to turbocharge demand in tightly-contested price brackets.

🔍 Lived Reality & Market Signals 
Cate shares what she’s seeing on the ground. First home buyer confidence is up and brokers are reporting a surge in FHB pre-approvals. Dave breaks down the lender variations too because even though there are 33 participating lenders, each has its own rules on how much savings buyers must contribute. 

💰 The Numbers That Matter 
Using an $800k purchase example, Cate shows just how game-changing this is: requiring only $40k instead of $160k saves years of waiting, plus buyers avoid tens of thousands in Lenders Mortgage Insurance (LMI). But beware...stamp duty can still bite hard, especially in VIC and NSW, and in some cases can even exceed the deposit. That means a 5% deposit isn’t the whole story. Buyers still need buffers and strategy. 

📈 Will This Push Prices Up? 
Short answer: yes. Treasury forecasts a modest 0.5% uplift, but independent modelling suggests growth from 3.5–6.5% in key price brackets is more likely, especially where demand is already hot. Over time, supply could catch up, but in the short term, the Trio expect competition to rise.  The scheme creates opportunity, but strategy, buffers, and smart lending advice remain essential. This initiative is great for the right buyers, not a cure-all for affordability, and definitely a market-mover.

And our gold nuggets!.....

Cate Bakos's gold nugget: Cate reflects on the policy, and what she'd do differently. "I do like the policy, but I don't like price caps. They segment markets". Cate proposes an uncapped offering.

Dave Johnston's gold nugget: Dave feels the policy makers could have spent more time on the scheme to have it more appropriately targeted. He uses singles without parental support as a key example of one of the categories of buyers who really need the help. 

Shownotes: https://www.propertytrio.com.au/2025/11/03/fhb-deposit-guarantee/