Navigating the New Era of First Home Buyer Lending
- Mar 12
- 4 min read
The Australian housing landscape has shifted significantly — and for First Home Buyers, that's largely good news. Following a policy-heavy 2025 election year, homeownership is now more accessible than it has been in years.
But the "how" has changed. Understanding the nuances of recent lending changes — and the support available to navigate them — is now essential for anyone looking to get into the market.
What's changed for First Home Buyers?
Recent government interventions have significantly lowered the barriers to entry for First Home Buyers, targeting two of the biggest hurdles: deposit constraints and serviceability requirements.
1. Expanded Home Guarantee Scheme (HGS)
Since the expansion late 2025, the HGS has become a primary driver for city markets. Here's what it means in practice:
Low Entry Cost: First Home Buyers can now enter the market with just a 5% deposit and no Lenders Mortgage Insurance (LMI).
No Income Caps: The removal of income restrictions and the increase in property price caps have brought high-income, low-deposit buyers into the First Home Buyer pool, including inner-city professionals who were previously locked out.
Unlimited Places: Unlike previous iterations, the scheme now offers unlimited places, providing a consistent stream of demand.
2. Help to Buy Scheme (Shared Equity)
This shared equity program is specifically designed for First Home Buyers with lower serviceability. Key details:
The government takes a 30% stake in established homes or a 40% stake in new homes.
Buyers can secure a property with as little as a 2% deposit.
The scheme is capped at 10,000 applications per year and is available only through two eligible lenders.
3. APRA's DTI Rules — A Shift Toward New Homes
One of the most significant changes arrived on February 1, 2026, when APRA introduced Debt-to-Income (DTI) restrictions, limiting high-risk lending where debt exceeds six times a purchaser's income.
Crucially, these restrictions do not apply to the purchase of new homes. This creates a meaningful advantage for First Home Buyers considering new homes, buyers with higher DTI ratios are naturally directed away from the established market and toward new construction.
For First Home Buyers with higher debt-to-income ratios, new homes aren't just an option — they're increasingly the only pathway.
Why First Home Buyers can be tricky to convert, and how to navigate it.
Despite high demand, First Home Buyers often face a longer, stickier path to settlement. The challenges are largely administrative and financial:
Deposit Mismatches: First Home Buyers are increasingly requesting 5% deposits in contract conditions to match HGS requirements, while the industry standard remains 10%. This creates uncertainty at the contract stage.
Slow Government Approvals: For Help-to-Buy sales, government approvals are notoriously slow. Contracts are often signed "subject to finance," dragging out the timeline from signed contract to unconditional status.
The Pre-Approval Trap: Many First Home Buyers obtain pre-approvals directly from banks, approvals that are valid only for established homes. When they pivot to a house and land package, they're forced to restart the process from scratch, causing significant delays.
How MyFirstHome helps you get there.
MyFirstHome exists to solve the finance delay, the single biggest friction point in the First Home Buyer journey. Here's how:
Boosting Borrowing Power: While major banks apply a rigid 3% serviceability buffer, MyFirstHome's access to non-bank lenders allows the use of a 2% buffer instead. That single change can increase a First Home Buyer's borrowing capacity by up to 10%. Combined with the ability to lock in 5-year fixed rates, borrowing capacity can increase by as much as 30%
Streamlining the Path to Settlement: We solve the finance delay in three specific ways:
Fast Qualification: We quickly identify qualified buyers so you only invest time in those with the genuine financial capacity to settle.
Specialised Pre-Approvals: We ensure buyers have the right pre-approval for new homes from day one, preventing the costly "back-to-the-bank" delays.
Incentive Maximisation: Our deep understanding of state and federal incentives ensures every dollar available to First Home Buyers is put to work, bridging the gap between their budget and the price point.
The 2026 First Home Buyer market is full of opportunity, for those who know how to navigate it.
The landscape has shifted in favour of new homes and First Home Buyers who understand their options. With the right guidance and the right lending partner, getting into the market is more achievable than it's been in years.
MyFirstHome offers direct access to a database of qualified, ready-to-act First Home Buyers, and the lending expertise to get them across the line.
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Mortgage brokerage services are provided by a related body corporate of MyFirstHome Pty Ltd. MyFirstLoan.com.au Pty Ltd ACN 168 808 948 (MFL) is a credit representative (Australian credit representative number 554038) of Allied Financial Consulting Pty Limited ACN 059 732 415, which holds Australian Credit Licence number 393645. As a credit representative, MFL is authorised to provide credit services where it is not a credit provider under any credit contract, for example, to act as a broker for loans provided by other credit providers. Loans brokered by MFL are structured and managed by Homestar Finance (which holds Australian Credit Licence 390690), which engages a professional trustee and lender to be the 'lender of record' for its loans. Quoted rates are correct as at publication date.
