5% deposit scheme expands early – will it increase house prices?

The popular Home Guarantee Scheme that lets first home buyers get into the market with just a 5% deposit has been expanded sooner than expected. But an unexpected twist means first home buyers may want to bring forward their buying plans.

The Home Guarantee Scheme (HGS) allows first home buyers to buy with just a 5% deposit – and not pay lenders mortgage insurance.

At present, the HGS is only available to first time buyers who meet various conditions around personal income and the price they pay for their home. There are also annual limits on the number of buyers who can access the scheme.

The HGS was due to be expanded in 2026 to allow all first home buyers to buy a home with as little as a 5% deposit.

This week saw these changes brought forward to 1 October 2025.

It’s great news for first home buyers who may not previously have been eligible for the HGS. However, as we’ll see, it could also be the cue to bring forward your buying plans.

How the 5% deposit scheme works

As home prices rise, it’s no mean feat pulling together the funds needed for a 20% deposit.

So it’s no surprise the HGS has proven very popular.

Since launching in 2020, the scheme has helped more than 230,000 first home buyers enjoy the rewards of home ownership with a deposit as low as 5%.

While the HGS doesn’t involve a cash payment to first home buyers, it can help you save in other ways.

As the federal government guarantees part of your home loan, this waives the need for lenders mortgage insurance – a saving that can be worth tens of thousands of dollars.

How the 5% deposit scheme is changing

From 1 October, all first home buyers will have access to apply for the HGS.

The current caps on the number of places, and income limits, will be scrapped.

The scheme’s property price limits will also be set higher, providing access to a greater variety of homes.

In addition, the Regional First Home Buyer Guarantee will be replaced by the First Home Guarantee.

Minister for Housing Clare O’Neil says these changes are all about getting more people into their first home sooner.

Why consider bringing forward buying plans?

The early expansion of the HGS may provide a valid reason to bring forward your buying plans.

The Insurance Council of Australia says the expansion of the scheme could see house prices rise up to 10% in the first year alone in markets preferred by first home buyers.

Nationally, it predicts prices could rise 3.5-6.6%.

The logic here is that the expanded scheme may create more buyer demand in Australia’s already undersupplied housing market, thereby pushing up prices.

Talk to us to find out if you’re home loan ready

The reality is that no one can say for sure how home prices will rise in the future.

What we can say, though, is that most people find it more rewarding to pay off their own home than they do their rent.

Remember too, you can still apply for the HGS before 1 October, as long as you meet the income caps and current property price limits.

Talk to us today to see if you could buy with a 5% deposit. You could be home loan ready right now!

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to your circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Surge in switching: 1,000 home loans refinanced every day

Three rate cuts since February have spurred home owners to take a closer look at their home loan. Turns out plenty have found a loan better suited to their needs elsewhere, with 100,000 home loans refinanced in the past quarter.

It’s not every day we do a double-take looking at lending numbers.

But it happened this week, with the latest ABS data revealing an astonishing 1.26 million home loans have been refinanced over the past three years.

A rise in refinancing kicked off when the Reserve Bank of Australia (RBA) hiked rates across 2022 and 2023.

Now that rates are on the way down, home owners are just as eager to switch.

Almost 100,000 mortgages were refinanced in the June 2025 quarter. That’s just over 1,000 home loans daily – the highest level since September 2023.

Here’s why Australians are refinancing in such large numbers.

The potential to save on loan interest, lower repayments

The RBA has handed home owners savings on a platter in recent times, with three rate cuts totalling 0.75% so far this year.

But home owners hungry for more have the potential to unlock extra savings.

Canstar has crunched the numbers, finding that a borrower with a $600,000 loan could save more than $12,000 over the next two years by switching to a lower-rate loan.

This assumes the borrower hasn’t renegotiated their rate in the last three years. But that’s not unreasonable.

Meanwhile, a Finder survey shows more than one-in-two home owners have no idea what rate they’re currently paying.

A chance to access home equity

Refinancing may offer more than rate savings.

Switching to a new loan could be an opportunity to tap into the equity built up in your home. And you could have a lot more equity than you realise.

Home values nationally have risen 45% in the last five years, and are 65% higher than they were a decade ago.

So if you need funds for a variety of purposes – from renovating your home, to paying for the kids’ education, to investing in a rental property – refinancing may offer a lower-rate solution.

A loan better suited to your needs

Switching to a new home loan may also be a chance to access improved loan features.

Maybe you’re keen to take advantage of an offset account or split your loan between fixed and variable rates.

If your current loan doesn’t offer these or other features such as a redraw facility, it could be worth looking into refinancing.

Leave the legwork to us

More than a hundred thousand families have benefited from refinancing in the last quarter alone.

The longer you put it off, the longer you may keep paying your old rate.

Contact us today and we’ll help you get the ball rolling.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to your circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Third rate cut delivered this year as RBA trims cash rate to 3.60%

Borrowers around the country have been delivered a sunnier financial outlook this month after the Reserve Bank of Australia (RBA) today trimmed the cash rate by another 25 basis points to 3.60%. How much could your monthly mortgage repayments decrease?

After last month’s unexpected hold, the RBA this month went with market expectations and delivered its third cash rate cut in 2025 in an attempt to ease cost-of-living pressures on Australian families.

RBA Governor Michele Bullock said in a statement that the Board unanimously decided to cut the cash rate by 25 basis points as underlying inflation continued to decline back towards the midpoint of the 2-3% target range.

How much could you now save on your mortgage repayments?

Unless you’re on a fixed-rate mortgage, hopefully your bank will soon follow the RBA’s lead and decrease the interest rate on your variable home loan.

For an owner-occupier with a 25-year loan of $500,000 paying principal and interest, this month’s 25 basis point rate cut means your monthly repayments could decrease by about $76 a month.

That would put $912 a year back into your household budget.

If you have a $750,000 loan, your monthly repayments will likely decrease by about $114 a month – or $1368 per year.

Meanwhile, a $1 million loan could decrease by about $152 a month – or $1824 a year.

This all assumes that your lender automatically passes on the full 25 basis point cut to your home loan.

Another thing to consider is that not all lenders automatically reduce variable home loan repayment amounts in line with rate cuts.

Some lenders simply maintain your repayment amount at the old level. It’s just that more of your money goes towards paying off the principal (rather than the interest) each month. But you can ask them to reduce your repayments in line with their cuts.

To find out what your lender is doing with your loan, get in touch with us in a few days once the dust has settled.

Still feeling stress from your mortgage?

Even with this latest rate cut, many Australian families are still grappling with living costs and interest rates that are higher than when they first took out their home loan.

If that includes you, now could be a good time to check in with us for a home loan health check.

You might be able to improve your situation by either renegotiating with your current lender, refinancing to another lender, or through debt consolidation.

Whatever your situation, we’re here to help you explore your options.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to your circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Skipping pre-approval sees 1-in-10 first home buyers miss out

Buying a first home isn’t always easy, and first-timers sometimes miss out on a place they’ve set their heart on. But more than one-in-ten first-time buyers have missed out simply because they didn’t have home loan pre-approval.

Buying a first home can be an emotional roller coaster. It’s not unusual to find a property you love, only to lose out.

A Finder survey shows three-in-five first home buyers have been beaten to homes – usually because they’ve been outbid by a competing buyer.

There’s not a lot you can do about another buyer having deeper pockets.

But there are steps you can take to potentially give yourself a strategic advantage.

One of them is having home loan pre-approval.

Yet Finder reports more than one-in-ten (11%) first home buyers lost out on a home because they didn’t have pre-approval in place.

Here’s why pre-approval can give you a competitive edge.

What is home loan pre-approval?

Home loan pre-approval involves applying for a home loan before you begin house-hunting.

It’s a chance for a lender to check out your details (such as your income, deposit and savings record), and give you the thumbs-up for a loan to a certain price limit.

Think of it as you and your lender both swiping right on each other.

Pre-approval shouldn’t cost you anything. And you’re not committed to take out the loan.

But it can be very reassuring to know you’re good for finance when the right property comes along.

As the lender specifies how much you can borrow, pre-approval also helps set a buying budget, and lets you confidently negotiate on price or bid at auction.

The risks of skipping loan pre-approval

Of course, you can choose to apply for a loan after you’ve found a home to buy.

It can be a more high-stakes approach, and leaving things this late can put you at a disadvantage.

Lenders usually need time to review your application and decide if you qualify for a loan – and how much you can borrow.

That time gap could see a more organised buyer jump in and beat you to the finish line if time is a factor for the vendor.

There’s also the risk of overestimating your borrowing power (that said, we can help you work that out without going through formal home loan pre-approval).

Long story short, while loan pre-approval is not compulsory, it can be a smart step that lets you act fast – and with confidence – and it tells sellers you’re a serious contender for the property.

The fine print on home loan pre-approval

A few finer points of home loan pre-approval are worth knowing:

1. Pre-approval comes with a time limit: loan pre-approval doesn’t last indefinitely. In most cases, pre-approval extends for three to six months depending on the lender. Don’t let this rush you. We can help you reapply for pre-approval if that time lapses.

2. Pre-approval is based on your circumstances when you apply: life doesn’t stand still for long. If your circumstances change after receiving home loan pre-approval, let us know and we can talk to your lender to update your pre-approval.

3. Not all lenders offer home loan pre-approval: every lender is different. And some choose not to offer loan pre-approval. We can save you time by explaining the lenders that offer pre-approved home loans.

Get in touch for more information

If you’re not sure where to begin with home loan pre-approval, contact us today.

We can guide you through the steps involved, and explain how home loan pre-approval could help you beat other buyers to the punch.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to your circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

How your home can help your kids get a great education

Location, location, location. Or should we say: education, education, education. New research shows homes in the catchment areas of sought-after public schools can command six-figure price premiums. Here’s why.

Your home can be much more than a roof over your head. It’s also an investment that may build personal wealth and serve as a form of disciplined saving.

And a new analysis by Cotality (formerly CoreLogic) shows our homes can also play an unexpected role, such as helping our kids enjoy a decent education.

Families pay 6-figure premiums for homes in popular catchment zones

Cotality recently looked at property values inside high-performing public high school catchment zones in Sydney and Melbourne.

It found what families around Australia have probably long suspected – that homes located inside catchment areas for popular public schools can command 6-figure premiums compared to similar properties outside the school zone.

The willingness of families to pay more isn’t just about the kids being able to walk to school.

Cotality says that while the price premium within popular public school zones can top $100,000, this can still see families saving money when compared to paying for private schooling over many years.

Better still, unlike school fees, which tend to rise over time, mortgage repayments often decrease in real terms due to inflation.

3 ways your home (and home loan) could help with school costs

Pulling up stumps and moving to a new home within a particular school catchment isn’t for everyone.

Fortunately, there are other ways your home and mortgage could help fund a quality education.

Here are three strategies you could consider.

1. Pay for school fees using an offset account

An offset account is an at-call account linked to your home loan.

Instead of earning separate interest on the offset account, the balance is deducted from (or ‘offset’ against) the value of your home loan when loan interest is calculated.

If you have, say, $50,000 in the offset account, and a mortgage of $600,000, loan interest will be based on a balance of $550,000 instead of $600,000.

In this way, an offset account can help you achieve two goals – providing a secure place to grow savings for your child’s education, while also helping you get ahead with your home loan.

2. Tap into home equity

Home equity – the difference between the current market value of your home and your loan balance – can be put to work to achieve a variety of personal goals.

With almost half (44.8%) of all suburbs across Australia now at record high values, you could have more home equity than you realise.

One way to use equity is to request a loan top-up from your lender. We can explain what’s involved for your specific circumstances

In general though, the decision to tap into home equity should be a cue to review your home loan.

Refinancing to a new loan could see you save with a lower rate or access improved loan features – all while freeing up equity to pay for a place in the school of your choice.

3. Invest in a rental property

A rental property may also help pay for your child’s education.

Your tax advisor or accountant can explain if an investment property is a suitable choice for you.

Broadly speaking though, the regular rent you receive, plus possible tax savings from negative gearing, and a rise in the property’s value over time (which can generate more equity to use) all have the potential to help you fund school costs down the track.

Alternatively, you could also consider rentvesting.

This can allow you to buy a more affordable property that’s outside your desired school’s catchment area, while renting a home to live in inside the catchment area.

Keen to learn more?

Paying education expenses can be challenging. But let’s face it, so can a mortgage if you overextend yourself.

That’s why it can be important to assess your borrowing capacity before you go house hunting.

We can help you work out how much you can comfortably borrow, which in turn, can help you buy a home in the catchment area of a school that you’d like to send your kids to.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to your circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.