If you’re a first-home buyer in Australia, October 1, 2025 marks a turning point. The First Home Guarantee has just been expanded to open the door for more eligible first home buyers to take advantage of the scheme. And if you don’t fit this offering, there are other policies like longer loan terms, LMI waivers, and guarantor options that could make buying your first property more achievable than ever.
At Prosperity Lending, we specialise in helping first-home buyers navigate these opportunities. Here’s what you need to know.
First Home Guarantee – From 1st October
The updated First Home Guarantee has been redesigned to break down some of the biggest barriers for buyers:
- Buy with as little as 5% deposit.
- No income or spot caps—all eligible buyers can apply.
- Property price thresholds lifted (up to $1.5M in Sydney & Newcastle & $1M in Brisbane)
- No LMI payable under the scheme, saving buyers thousands.
This means you can step into the market sooner, without waiting years to save a 20% deposit.
HECS/HELP Debt – How It’s Treated
Student loans can quietly reduce your borrowing power. Most lenders treat HECS/HELP debt as a liability, which reduces how much you can borrow.
But not all lenders are the same:
- Some will look to exclude the debt if you can pay it off within a certain time frame, allowing you to borrow far more than you can with other lenders.
This is where working with a broker matters—we know which lenders are more flexible.
Longer Loan Terms
A growing number of lenders now offer 40-year home loans.
- Lower monthly repayments make borrowing more affordable.
- Helpful as a stepping stone strategy—buy sooner, refinance later.
- Be mindful: you’ll pay more interest across the life of the loan.
For some first-home buyers, this flexibility is the key to entering the market earlier.
Guarantor Loans
Don’t have the 5%? Family support can be a powerful way to get onto the property ladder. With a guarantor loan:
- A parent or relative provides equity in their own property as additional security.
- You may be able to borrow up to 100% of the purchase price plus costs.
- You’ll avoid paying LMI, even without a big deposit.
This option can save years of saving if family support is available.
LMI Waivers for Professionals
If you work in certain industries—medicine, law, accounting, engineering—you may qualify for an LMI waiver with specific lenders.
This means:
- 5–10% deposit accepted with no LMI.
- Savings of $10K–$30K+ upfront.
- Often combined with competitive interest rates.
For eligible professionals, this is one of the most cost-effective ways to enter the market.
What This All Means for First-Home Buyers
The October 1 updates to the First Home Guarantee are just one piece of the puzzle. With multiple pathways available—from guarantor support to profession-based waivers—there are more ways than ever to achieve your first-home goal.
The challenge is knowing which path fits your circumstances best. Each comes with unique eligibility, benefits, and trade-offs.
How Prosperity Lending Can Help
At Prosperity Lending, we make the complex simple. We’ll:
- Check your eligibility for the First Home Guarantee.
- Compare lenders’ treatment of HECS/HELP debt.
- Explore longer loan terms or guarantor loan pathways.
- Confirm if you qualify for a professional LMI waiver.
We’ll put your options side-by-side so you can make an informed decision and take the smartest path to owning your first home.