ACT’s Professional Advantage: Save $70,000+ in Australia’s Most Stable Market
The Australian Capital Territory offers first home buyers a unique combination of Australia's most stable employment market and strategic government...
The dream of homeownership feels closer than ever with the Australian Government’s expanded First Home Guarantee (FHG) scheme launching October 1st, 2025. For the first time, all eligible first-home buyers can enter the market with just a 5% deposit, unlimited places, and no income caps. But alongside this opportunity comes a critical question that keeps many potential buyers awake at night: “What happens if I buy with 5% and the market drops?”
At Investors Choice Mortgages, we believe in empowering you with complete transparency about both the opportunities and risks ahead. Having guided clients through multiple market cycles over our 19 years in business, we understand that smart first-home buyers want honest answers, not just sales pitches.
The Bottom Line: While buying with 5% deposit and experiencing a market drop could result in temporary negative equity (where your loan exceeds your property value), this doesn’t spell disaster if you don’t need to sell immediately. The key is treating your first home like an investment from day one, choosing a property with strong capital growth potential and holding for the long term.
What’s Changed: From October 1st, 2025, the expanded FHG removes all previous barriers: no place limits, no income caps, and significantly higher property price caps across Australia.
The Smart Strategy: Research-based property selection combined with expert mortgage structuring can protect you against market volatility while positioning you for long-term wealth creation.
Your Next Step: Book a consultation with our specialised first-home buyer expert brokers who understand both the opportunities and risks of the current market.
When you purchase a property with a 5% deposit, you’re borrowing 95% of the property’s value. If property values decline, you could find yourself in a position where your outstanding loan balance exceeds your property’s current market value; this is called negative equity.
Example Scenario:
Here’s what many first-home buyers don’t understand: negative equity only becomes a real problem if you’re forced to sell during the downturn. If you can continue making your mortgage payments and hold the property long-term, market cycles typically recover.
Historical Context: Australian property markets have shown resilience over the long term. While short-term fluctuations occur, properties purchased in well-researched locations with strong fundamentals have historically recovered and exceeded previous highs within 5-10 years.
The expanded First Home Guarantee represents the most significant change to first-home buyer assistance in decades. Here’s what’s transformative:
No Place Limits: Previously, only 35,000 guarantees were available annually. Now, every eligible first-home buyer can access the scheme.
No Income Caps: The previous income restrictions ($125,000 for individuals, $200,000 for couples) have been completely removed.
Higher Property Price Caps: Caps have increased dramatically across all states:
The government guarantee means you avoid Lenders Mortgage Insurance (LMI), which can save tens of thousands of dollars. For an $800,000 property with 5% deposit, LMI could cost around $35,000 money that stays in your pocket with the FHG, or not an extra loan you need to take, traditionally LMI (which protects lenders not you; is on top of the loan).
Important Note: The guarantee protects the lender, not you as the borrower. You’re still responsible for all loan repayments, but it enables access to the market with a smaller deposit.
To qualify for the expanded FHG from October 1st:
Under the leadership of Jane Slack-Smith, twice-awarded Australian Mortgage Broker of the Year, Investors Choice Mortgages has spent 19 years developing a unique approach that treats every property purchase as part of a broader wealth-building strategy.
The Financial Freedom Framework: We don’t just help you get a loan; we help you understand how your first home fits into your long-term financial goals. This includes:
Recognising that not every broker is right for every client, we’ve curated a network of specialised first-home buyer expert brokers who understand:
Experience: 19 years navigating market cycles, policy changes, and helping clients build wealth through property.
Recognition: Jane Slack-Smith’s double recognition as Australian Mortgage Broker of the Year demonstrates our commitment to excellence and client outcomes.
Education: We don’t just arrange loans, we educate you about your options, risks, and opportunities so you can make informed decisions.
Transparency: We disclose all fees and commissions upfront, ensuring you understand exactly what you’re paying and why.
Network: Our connections to buyers’ agents, financial planners, accountants, and other property professionals mean you have a complete team supporting your success.
While no one can predict short-term market movements perfectly, the current environment presents both opportunities and considerations:
Opportunities:
Considerations:
The expanded First Home Guarantee starting October 1st, creates an unprecedented opportunity for Australian first-home buyers. However, success isn’t just about accessing the scheme—it’s about making smart decisions that protect and build your wealth over the long term.
When you work with our specialised FHB expert brokers, you’re not just getting a loan—you’re getting:
Strategic Guidance: Understanding how your first home fits into your broader financial goals
Market Insight: Research-based analysis to help you choose properties with strong growth potential
Loan Structuring: Mortgages designed for flexibility and long-term wealth building
Professional Network: Access to buyers’ agents, financial planners, and other specialists
Ongoing Support: Relationship that extends well beyond settlement
Don’t let this opportunity pass by while you’re still researching. Our FHB expert brokers are ready to help you understand your options, assess your readiness, and create a strategy that works for your specific situation.
Ready to take the next step? Book a time with our FHB expert broker. Your consultation will cover:
The expanded First Home Guarantee won’t last forever, and neither will current market conditions. The first-home buyers who succeed are those who combine opportunity with strategy, speed with research, and optimism with realistic planning.
Your homeownership journey starts with a conversation. Book yours today.
Buying your first home with a 5% deposit does carry risks, particularly if property values decline in the short term. However, with proper research, strategic planning, and expert guidance, these risks can be managed while you capitalise on the unprecedented opportunities created by the expanded First Home Guarantee.
The key is approaching your first home purchase like an investment—focusing on areas with strong capital growth potential, ensuring comfortable serviceability, and maintaining a long-term perspective. When market cycles inevitably occur, well-researched properties in good locations typically recover and continue growing.
At Investors Choice Mortgages, we’ve spent 20 years helping clients navigate market cycles and build wealth through property. Our specialised FHB expert brokers understand both the opportunities and risks in today’s market, and we’re committed to helping you make informed decisions that serve your long-term interests.
The expanded First Home Guarantee, starting October 1st may be the catalyst you need to stop paying someone else’s mortgage and start building your own wealth. But success requires more than just access to the scheme; it requires strategy, research, and expert guidance.
Your future self will thank you for taking action today. Download your free First Home Buyer Guide and book your consultation with our FHB expert broker. Together, we’ll create a plan that turns your first home purchase into the foundation of lifelong financial security.
What if I lose my job after buying with 5% deposit?
This is why serviceability assessment is crucial before purchase. Ensure you have:
Should I wait for the market to crash before buying?
Trying to time the market is notoriously difficult. Consider these factors:
Can I use the FHG for an investment property?
No, the FHG is only for properties you’ll live in as your primary residence. However, many clients later convert their first home into an investment property when they upgrade, creating a foundation for wealth building.
What happens if property prices drop 20%?
While a 20% drop would create significant negative equity, it’s important to remember:
How do I know if I’m ready to buy?
You’re ready when you have:
What’s the difference between using a bank directly versus a broker?
Banks can only offer their own products, while our expert brokers have access to 30+ lenders participating in the FHG scheme. This means:
Will the expanded FHG push up property prices?
Some market analysts predict 3-6% price growth in target price brackets due to increased demand. However:
Can I upgrade later if I buy with 5% deposit now?
Absolutely. Many clients use their first home as a stepping stone to build equity, then either:
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