Home Guarantee Scheme Tasmania 2025: Buy a Home with a 5% Deposit

From 1 October 2025, the Australian Government is rolling out a major expansion to the Home Guarantee Scheme, making it easier for first-home buyers to get into the property market with as little as a 5% deposit.

At Finance Brokers Tasmania (FBT), we’ve been helping locals “find their best future” since 1986. With this expansion, we see some exciting opportunities for Tasmanians, especially given the new $700,000 price cap for Hobart and $550,000 for the remainder of Tasmania.

Key Changes Coming in October 2025

• Unlimited places: No more annual caps. If you’re eligible, you won’t miss out due to limited spaces
• No income limits: Buyers in Tasmania now qualify regardless of household income.
• Updated price caps:
  • Central Hobart up to $700,000 and regional Tasmania up to $550,000
  • Other states and cities see caps as high as $1.5M
• One streamlined program: The regional guarantee is now merged with the standard scheme, making applications simpler.

Why This Matters for a First Home Buyer Tasmania

1. Lower deposit hurdle – As a first home buyer in Tasmania, you may find saving a 20% deposit has been a major barrier. The Home Guarantee Scheme can help you get in with just 5%. With the Hobart property market median house price currently sitting around the new cap, a buyer can now enter the market with $35,000 (5%) + costs instead of $140,000 (20%) + costs. In the remainer of Tasmania, purchasing a home for $550,000 means you will require a deposit of $27,500 (5%) + costs instead of $110,000 (20%) + costs.
2. Stamp Duty Exemption – don’t forget that the Tasmanian Government first home buyers stamp duty exemption is still available when you buy your first home Tasmania, and the purchase is under $750,000 (further eligibility criteria may apply)
3. Lenders Mortgage Insurance (LMI) savings – Buyers could save tens of thousands of dollars in upfront costs.
4. Regional opportunity – With no income caps, Tasmanians across a range of professions are now able to apply.
5. Faster pathway – For many, this could cut years off the deposit-saving timeline.

What to Watch Out For

While the scheme brings enormous benefits, expanding the eligibility criteria and caps there are some things to consider:

• Upward pressure on prices: With more buyers able to enter the market, Tasmanian property prices—already tight due to supply shortages—could climb further.
• Higher borrowing risk: A 5% deposit means you’re more highly leveraged. Interest rate changes or market downturns could create financial strain.
• Limited supply in Tasmania: Unlike larger states, the pool of available properties under the Tasmania caps may be slim, especially for houses in Hobart and Launceston.

How to Apply in Tasmania

1. Check eligibility: Must be an Australian citizen or permanent resident, a genuine first-home buyer (or not owned for 10+ years), and the property must be your primary residence.
2. Confirm the price cap: For central Hobart the property must be under $700,000 and the remainder of Tasmania $550,000.
3. Talk to our brokers: At FBT, our mortgage brokers will help you determine how much you can afford to borrow, guide you through the eligibility tool and application process and with over 30 lenders nationwide including local Tasmanian lenders, we will help you find the loan to meet your individual needs.

FBT welcomes the Expansion

At Finance Brokers Tasmania, we welcome this expansion. We know what a challenge it can be to get your foot in the door of your first home so expanding the scheme could be the difference between continuing to rent and stepping into your own home. But we also encourage caution:

• just because you can borrow up to 95% doesn’t always mean you should or can. It's important to remember that you will need to have the income to meet the lender's criteria when it comes to making your monthly repayments.
• don’t forget there will costs on top of the purchase price of the property. These can include legal fees, lender fees, mortgage registration fees and valuation fees.
• strategic planning, budgeting, and choosing the right lender are just as important as the scheme itself.

Don't forget there are other support options available

While the Home Guarantee Scheme is assisting many first home buyers get into their first home, there are still other options available:

• Parental Guarantee – if the home you are buying is outside the maximum lending caps, you may still have the option of a parental guarantee (more lovingly known as the ‘bank of mum and dad’). This can be through providing a cash injection towards your deposit or using property for additional security. You can find out more check out our blog Get into your first home sooner with a parental guarantee!
• The Tasmanian Government MyHome Shared Equity Program. This initiative allows you to share the cost of buying your home with the Tasmanian Government with as little as a 2% deposit. With this program, the government will have an equity share in your home of up to 40% of the purchase price.

Final Thoughts

The expanded Home Guarantee Scheme from 1 October 2025 will be a game-changer for many Tasmanians:

• only a 5% deposit required
• No income limits
• more realistic caps - $700,000 cap in central Hobart & $550,000 cap in the remainder of Tasmania
• Huge LMI savings

If you’re considering buying your first home in Tasmania, now’s the time to prepare. At Finance Brokers Tasmania, our team is here to help you navigate the scheme, understand your options, and make confident decisions for your future.

From saving to settling — we’ll guide your 5% deposit journey