The Australian Government has announced a major expansion of the Home Guarantee Scheme, fast-tracked to start on 1 October 2025. For Western Australians, this could mean new opportunities to enter the market with a lower deposit — but experts are also warning it may push property prices higher.
In this article, we’ll break down what’s changing, how it affects Perth and regional WA buyers, and what you should consider before jumping in.
What is the Home Guarantee Scheme?
The Home Guarantee Scheme (HGS) helps eligible buyers purchase a property with as little as a 5% deposit (or 2% for the Family Home Guarantee). The Government acts as guarantor for part of the loan, which means buyers can avoid paying lenders’ mortgage insurance (LMI) — a cost that can run into tens of thousands.
What’s Changing from 1 October 2025
The expansion brings some of the most significant updates since the Home Guarantee scheme was introduced:
- No participant limits – The scheme will now be uncapped, meaning there’s no race to secure a limited number of places.
- Income eligibility removed – More buyers can qualify, regardless of income.
- Higher property price caps – In Perth and regional WA, the cap has been lifted to $850,000, up from $600,000.
- Early start – Changes kick in on 1 October 2025, three months ahead of schedule.
- LMI savings – Collectively, Australians are expected to save around $1.5 billion in LMI over the next year.
What This Means for WA First Home Buyers
The raised property price cap is particularly significant for Perth, where the median house price has now passed $800,000 according to REIWA (Current August 26, 2025). It also helps regional buyers in growth areas like Bunbury, Albany, and Geraldton, where prices have climbed sharply in the past two years.
For many first-home buyers, especially those struggling to save a 20% deposit while rents remain high, this could open the door to homeownership sooner.
The Warnings: Could Prices Rise?
While the expansion creates more opportunity, property experts are sounding caution:
- Analysts estimate house prices could rise by 3–6% nationally in 2026, and up to 9–10% in certain markets.
- In WA, where housing supply is already under pressure, extra demand could intensify competition, especially in Perth’s inner suburbs and popular regional hubs.
- Without more housing supply, the scheme may help some buyers today, but push affordability further out of reach tomorrow.
Opportunities and Considerations in WA
The opportunities:
- Get into the market with a 5% deposit
- Avoid LMI and save potentially $20,000–$40,000 on upfront costs
- Lower repayments per month because the LMI is not added to the loan amount
- Higher cap makes more Perth and regional properties eligible.
The considerations:
- Higher demand could push up prices
- Borrowing with a small deposit increases your loan-to-value ratio, meaning higher repayments and less buffer if rates rise
- Properties near the new cap ($850k) may become hotly contested.
How Base Home Loans Can Help First Home Buyers
Buying your first home is exciting, but the changes can be overwhelming. At Base Home Loans, we:
- Help you understand your eligibility under the new Home Guarantee scheme
- Compare lenders who participate in the HGS
- Run the numbers to show whether it’s the right fit for your financial situation
- Provide guidance on WA’s First Home Owner Grant (FHOG) and stamp duty concessions, which may be available alongside the scheme.
The expansion of the Home Guarantee Scheme could be a game-changer for many Western Australians, particularly first-home buyers priced out of the market. But with experts warning of possible price growth, it’s important to approach the opportunity with a clear strategy.
If you’re considering using the Home Guarantee scheme, speak to a broker who understands the WA market and can help you make the most of the changes.
👉 Ready to see if you qualify? Get in touch with Base Home Loans today to explore your options.
You can also view all of this information and more on our dedicated First Home Buyers information page.
Or read the official statement from Housing Australia about the changes here.
Disclaimer: The information provided on this blog is for general informational purposes only and does not constitute financial or professional advice. While we strive to provide accurate and up-to-date information, mortgage laws and regulations can change, and individual circumstances may vary. We recommend consulting with a qualified financial advisor or mortgage broker to assess your specific situation and needs. Base Home Loans is not responsible for any actions taken based on the content of this blog. Always conduct your own research and consider seeking professional advice before making financial decisions.
