New First Home Guarantee Changes – What This Means for First Home Buyers in NSW

Thinking about buying your first home in NSW? Good news. The Australian Government’s Home Guarantee Scheme (previously the First Home Guarantee) has been updated, making it even easier for First Home Buyers in NSW to purchase a new home.

Here’s what’s new:

Buy with Just a 5% Deposit and Avoid LMI in NSW

You’ll need to save a minimum 5% deposit, and the Government will guarantee part of your loan. This means you won’t have to pay Lenders Mortgage Insurance (LMI), which often costs thousands of dollars. For many first home buyers, this can represent a significant saving.

No Income Caps for First Home Buyers

From 1 October, income caps are removed. This means that regardless of how much you earn, as long as you meet the first home buyer eligibility requirements, you can apply for the scheme.

Higher Property Price Caps in NSW

More properties now qualify under the scheme. In NSW capital cities and regional centres, the property price cap has increased to $1,500,000 (up from $900,000). In other NSW areas, the cap has risen to $800,000 (up from $750,000). This opens up more choice for buyers in higher-priced suburbs.

Simpler Access for Regional First Home Buyers Whether you’re buying in the city or regional areas, the First Home Guarantee applies to both metropolitan and regional areas across NSW. Previously there were limitations and a separate scheme for regional areas.

What this means
Because of the $1.5 m cap in Sydney, many house-and-land packages or new land-plus-build offers now fall within scheme limits. That can reduce your upfront cost by avoiding LMI. But keep in mind: even though you might tick the scheme boxes, your lender still needs to approve you — your borrowing power still has to stack up.

Key reminders:

  • This is for owner-occupiers only (investment purchases aren’t eligible)
  • Standard income and regional price caps apply depending on the area
  • You must apply through a participating lender and ideally get pre-approval

What to take away:
If in past years you felt priced out by LMI or were too late to secure a placement, 2025–26 really does look different. Broadening eligibility, higher caps, and no place limits make things more accessible. That said — you still need to make sure your repayments, interest-rate rises, and other costs like rates/maintenance fit your budget.

Other Schemes Available to First Home Buyers in NSW

First Home Buyers Assistance Scheme (FHBAS) — Stamp Duty Relief

Eligible first home buyers can receive a full exemption from transfer duty on homes valued up to $800,000. For homes priced between $800,000 and $1,000,000, a concessional (reduced) rate applies. If you’re buying vacant land to build on, you can claim a full exemption for land valued up to $350,000, with concessional rates for land valued between $350,000 and $450,000.

First Home Owner Grant (FHOG) — $10,000 for New Homes

A one-off $10,000 grant is available to first home buyers purchasing a newly built or substantially renovated home. The property must meet certain price limits, which differ depending on whether it’s a house-and-land package or a separate build. Residency and other eligibility requirements also apply, so it’s important to check the details with your lender or conveyancer.

A smart move? Talk with your broker about how this Guarantee can pair with any other state incentives you’re eligible for (stamp-duty concessions, grants, etc.).