The Australian Government’s Home Guarantee Scheme has just become a more powerful tool for renters ready to take the next step into home-ownership. Recent changes applied to the Scheme in October 2025 are making it easier for eligible Australians to buy in Perth.
Home Guarantee Scheme: what is this?
The Home Guarantee Scheme (HGS) is an Australian Government initiative designed to help eligible buyers purchase a home with a smaller deposit and without paying Lenders Mortgage Insurance (LMI). Rather than providing funds directly to buyers, the government guarantees a portion of the loan to lenders, allowing first home buyers to purchase with as little as a 5% deposit, and single parents or legal guardians with a minimum 2% deposit.
This initiative opens the door for many Australians who have the income to support a mortgage but struggle to save a large upfront deposit, helping them make the move from paying rent to paying off their own home.
To benefit from the Home Guarantee Scheme, applicants must:
- Be 18 years or older
- Be an Australian citizen or permanent resident
- Be a first-time home buyer
- Be purchasing the property as their primary place of residence
The scheme also extends to single parents or legal guardians who are purchasing a home for the first time, recognising the unique challenges these buyers often face.
Home Guarantee Scheme: What’s New in 2025 in Perth.
In October 2025, the Australian Government expanded and updated the Home Guarantee Scheme to make the pathway to home ownership more accessible for eligible buyers in Western Australia (and across Australia). Indeed, these changes have simplified eligibility and broadened the scope of who can benefit from them.
From 1 October 2025, eligible buyers can:
- Buy your first home with a low deposit of just 5% (or in some cases 2%) instead of the traditional 20%.
- Avoid paying Lenders Mortgage Insurance
- Access higher property price caps, with homes in Western Australia now covered up to $850,000, giving greater flexibility in location and property type
- Take advantage of government-backed support by converting rent payments into home repayments, bridging the gap between renting and ownership
- Apply under relaxed income rules, as income caps have now been removed for many buyers, which means more Perth residents now have an opportunity to buy a home sooner.
Under this updated scheme, the criteria for eligibility also evolved. While income caps have been taken away, there are still conditions that need to be met to benefit from it:
- The property must be owner-occupied (you must live in it) — investment properties are not eligible under the scheme.
- You still need to meet standard lender criteria (income, serviceability, credit history) even though the government provides the guarantee.
- The purchase price must not exceed the location-based cap ($850,000 for the Perth capital city).
- Other costs still apply, such as stamp duty, legal fees, inspection costs, and moving costs. The Scheme reduces deposit and LMI burden, but does not eliminate all purchase costs.
Buying your first home: make the bright move with Vivid Property
At Vivid Financial, we believe everyone deserves a clear path to homeownership — and with recent updates to the Home Guarantee Scheme, many renters now have a genuine opportunity to turn their rent into home equity. What was once out of reach for many Australians is now more attainable, giving first-time buyers the confidence to take that exciting next step towards owning a place they can truly call home.
However, while these updates make it easier, the journey to becoming a homeowner can still feel challenging and, at times, overwhelming, with plenty of factors to weigh up before making one of life’s biggest decisions. That’s why our team at Vivid Property is here to help you make the bright move. From financial guidance to property inspections and management, we’re with you every step of the way.
Our specialists at Vivid Financial offer free, no-obligation consultations to help you explore your options. We’ll outline which government schemes you qualify for, how much you could borrow, and what your deposit and monthly repayments might look like. By simplifying the process and breaking down the numbers, we make what seems complex, clear and achievable.
Even if you’re not quite ready to buy, we can help you set a plan to get there. Many renters are surprised to learn they’re closer to homeownership than they think — often needing less savings than expected.
If you’re ready to take the next step, get in touch today to book a free chat with our finance team. We’ll help you map out your best options and guide you confidently from renting to owning.
