Australia’s Housing Market: Navigating the First Home Guarantee Scheme

The Albanese government's new First Home Guarantee scheme, effective from Wednesday, aims to assist first-time home buyers by enabling them to purchase property with just a 5% deposit.

This means buyers won’t need to pay lenders’ mortgage insurance, as taxpayers will underwrite 15% of the mortgage.

This initiative has generated a lot of interest among potential buyers.

Research from Lateral Economics projects that this scheme could lead to a national house price increase of 3.5% to 6.6% by 2026, with sustained growth expected thereafter. However, in segments specifically targeted by first-home buyers under the scheme’s price caps, prices are anticipated to rise more sharply, ranging between 5.3% and 9.9%.

Sally Tindall from Canstar warns that the scheme is likely to amplify demand in an already heated property market, especially given the recent series of cash rate cuts. She suggests that banks see the scheme as an opportunity to expand their lending portfolios.

Cotality highlights a potential downside, noting that buyers using the scheme could pay over $130,000 more in interest over a 30-year loan at a steady 5.5% interest rate, compared to traditional mortgages.

Mortgage brokers, like Nathaniel Truong from Sydney, have observed heightened competition among buyers who can now borrow more due to the scheme. Truong shares examples where clients have increased their property budgets significantly, questioning whether savings on mortgage insurance translate into actual savings when overall spending climbs.

Eliza Owen from Cotality cautions that while early adopters of the scheme might benefit, subsequent first-home buyers could face challenges. As prices inflate, future entrants will confront a tougher market with higher prices and mortgages leading to greater debt burdens.

Owen raises concerns that small deposit requirements could lead to negative equity if the market experiences a downturn. Moreover, she posits that the government might be compelled to maintain policies that foster rising property values to safeguard their guarantee investments.

This intertwining of public policy and housing market dynamics suggests a move toward a state-backed property market, which could complicate efforts to stabilize or reduce prices in the future.

Published:Tuesday, 7th Oct 2025
Source: Paige Estritori

Share this news item:

Finance News

Westpac's Limited-Time Offer: $0 Establishment Fee on Motorcycle Loans

07 Oct 2025: Paige Estritori

Westpac has announced a promotional offer for individuals seeking to finance their motorcycle purchases. Until 30 October 2025, the bank is waiving the $250 establishment fee on its unsecured personal loans for motorcycles. This initiative aims to make motorbike ownership more accessible and affordable for Australians. - read more

National Finance and Loans Joins Forces with Honda Racing Australia

07 Oct 2025: Paige Estritori

National Finance and Loans (NFAL) has entered into a multi-year partnership with Honda Racing Australia, marking a significant collaboration in the Australian motorcycle racing scene. This alliance was unveiled at the final round of the Australian Supercross Championship, where NFAL assumed title rights for rider Alex Larwood's #5 entry. - read more

Plenti's Competitive Motorbike Loans: Finance Your Dream Ride

07 Oct 2025: Paige Estritori

Plenti, a multi-award-winning personal lender, has introduced motorbike loans with interest rates starting from 6.28% per annum. This offering is designed to assist Australians in financing their dream motorcycles, whether new or used. - read more

Australian Banks Lower Interest Rates Amid RBA's Policy Easing

29 Sep 2025: Paige Estritori

In a significant move affecting borrowers nationwide, Australia's major banks have reduced their interest rates following the Reserve Bank of Australia's (RBA) recent policy easing. This development is particularly relevant for individuals seeking motorbike financing, as it may lead to more favorable loan terms. - read more

Click for more Finance News

Bike Loans Articles

Avoiding Credit Pitfalls: A Motorcyclist's Guide to Smart Bike Loans

For many, experiencing the allure of the open road on two wheels isn't just about the destination; it's about the journey itself. Motorcycling represents freedom, a sense of adventure, and an expression of personal style. However, as with any significant purchase, it's crucial to approach the financing of your dream bike with as much enthusiasm as you do when selecting the make and model. - read more

Maximizing Your Motorcycle Loan: Budgeting Tips for Australian Riders

For motorcycle enthusiasts, owning and maintaining a bike is not just a hobby; it's a way of life. However, the financial aspects of this passion can sometimes be overwhelming. That's where budgeting comes into play. - read more

The Top 5 Motorcycles for Women Who Love Speed

Riding a motorcycle is an exhilarating experience, especially for female motorcycle enthusiasts who enjoy the thrill of speed. However, choosing the right motorcycle for speed is crucial to ensure a safe yet thrilling ride. - read more

From Dream to Reality: Steps to Take Before Applying for Your Motorcycle Loan

A sense of boundless excitement often accompanies the thought of buying your very first motorcycle. It's more than just a purchase; it's an entry pass to a lifestyle charged with freedom, wind in your hair, and the open road calling your name. The thrill of ownership however, comes with its fair share of responsibilities, chief among them being the financial commitment it demands. - read more

Start Here

Knowledgebase

Loan-to-Value Ratio (LTV):
A ratio that compares the value of the loan to the market value of the property securing the loan.

This website is owned and operated by Clark Family Pty Ltd (as Trustee for the Clark Family Trust) 43 Larch Street Tallebudgera QLD 4228, A.C.N. 010281008, authorised credit representative of Saccasan Pty Ltd, Australian Credit License 386297. Visit the ASIC website for additional licensing information.

IMPORTANT: We are neither authorised nor licensed to provide finance or financial products and we do not offer any form of credit or other financial advice. All product enquiries and requests for financial and/or other advice on this website are referred to third party intermediaries, insurers and lenders - with whom you can then deal directly. We may receive a fee or commission from these third parties in consideration for the referral. Before any action is taken to obtain a product or service referred to by this website, advice should be obtained (from either the third party to whom we refer you or from another qualified intermediary) as to the appropriateness of obtaining those products having regard to your objectives, financial situation and needs. Whilst we have our own process for vaidating the legitimacy of our referral partners, you should always verify the credentials of your financial adviser before proceeding with recommendations that they may present. Visit the ASIC website for further information.

Australia’s Housing Market: Navigating the First Home Guarantee Scheme

Australia’s Housing Market: Navigating the First Home Guarantee Scheme

Share this news item:

START HERE.