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Rising Debt Levels Among First-Home Buyers Post-Guarantee Scheme Expansion

Analyzing the Impact of Increased Borrowing on First-Time Homeowners

Rising Debt Levels Among First-Home Buyers Post-Guarantee Scheme Expansion?w=400

The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.

The recent expansion of the First Home Guarantee Scheme has led to a notable increase in borrowing among first-home buyers.
Data from Loan Market Group indicates that, following the scheme's October expansion, first-time buyers in New South Wales borrowed an average of $750,250 in October, up from $630,200 in the previous quarter-a 19% increase.
Similar trends were observed in South Australia, with average loans rising by $105,000.

This surge in borrowing is attributed to the scheme's raised price caps and the removal of income restrictions, enabling more buyers to enter the market with lower deposits. While this facilitates quicker access to home ownership, it also raises concerns about financial stability. The Australian Prudential Regulation Authority (APRA) has responded by limiting high debt-to-income lending, capping such loans at 20% of new mortgages to mitigate potential risks.

For first-home buyers, it's essential to balance the opportunity to enter the market sooner with the responsibility of managing higher debt levels. Prospective buyers should conduct thorough financial assessments, considering factors like interest rate fluctuations and personal income stability. Seeking advice from financial professionals can aid in making informed decisions that align with long-term financial health.

In conclusion, while the expanded First Home Guarantee Scheme offers valuable support to first-home buyers, it's crucial to approach increased borrowing with caution. Understanding the implications of higher debt and implementing sound financial planning are key to sustainable home ownership.

Published:Wednesday, 24th Dec 2025
Source: Paige Estritori

Please Note: If this information affects you, seek advice from a licensed professional.

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Finance News

Understanding Queensland's Boost to Buy Scheme for First-Home Buyers
Understanding Queensland's Boost to Buy Scheme for First-Home Buyers
24 Dec 2025: Paige Estritori
In a significant move to support first-home buyers, the Queensland Government has introduced the Boost to Buy scheme, a shared equity initiative designed to make home ownership more attainable. This program offers an equity contribution of up to 30% for new homes and 25% for existing homes, applicable to properties valued up to $1 million. Eligible households with incomes up to $225,000 can benefit from this scheme, which aims to reduce the deposit gap that often hinders first-time buyers. - read more
Rising Debt Levels Among First-Home Buyers Post-Guarantee Scheme Expansion
Rising Debt Levels Among First-Home Buyers Post-Guarantee Scheme Expansion
24 Dec 2025: Paige Estritori
The recent expansion of the First Home Guarantee Scheme has led to a notable increase in borrowing among first-home buyers. Data from Loan Market Group indicates that, following the scheme's October expansion, first-time buyers in New South Wales borrowed an average of $750,250 in October, up from $630,200 in the previous quarter-a 19% increase. Similar trends were observed in South Australia, with average loans rising by $105,000. - read more
The Impact of Victoria's Stamp Duty Concession Cap on First-Home Buyers
The Impact of Victoria's Stamp Duty Concession Cap on First-Home Buyers
24 Dec 2025: Paige Estritori
Victoria's existing stamp duty concession cap has become a significant hurdle for first-home buyers. The current scheme offers full stamp duty exemptions for properties up to $600,000 and concessions for those up to $750,000. However, with rising property prices, many first-time buyers find themselves exceeding these thresholds, resulting in substantial tax liabilities. For instance, purchasing a property valued at $750,001 incurs a stamp duty of $40,070, escalating to $55,000 for a $1 million property. - read more
Understanding APRA's New Cap on High Debt-to-Income Loans
Understanding APRA's New Cap on High Debt-to-Income Loans
24 Dec 2025: Paige Estritori
The Australian Prudential Regulation Authority (APRA) has announced a significant policy change aimed at mitigating risks in the housing market. Effective February 2026, APRA will implement a cap on high debt-to-income (DTI) home loans, limiting banks to issuing no more than 20% of new home loans with DTI ratios of six times or higher. This measure applies to both owner-occupier and investor loans, excluding new housing developments. - read more
ASIC's Deep Dive into Private Lending Reveals Industry Shortcomings
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24 Dec 2025: Paige Estritori
The Australian Securities and Investments Commission (ASIC) has conducted a comprehensive review of the private lending sector, uncovering several areas of concern. The investigation revealed inconsistent and unclear reporting, downplayed risks, opaque fee structures, conflicts of interest, and poor valuation practices within the industry. - read more
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