First-home buyer mortgages rise by $50,000 after income cap removal

Research commissioned by furniture retailer Temple and Webster indicates that the average mortgage for first-time buyers rose $49,800 after the federal government lifted income restrictions on the 5 % deposit scheme in October 2025. Although the total count of first-home loans declined, borrowers who secured the guarantee now face larger debt loads, translating into an extra $587 per month in repayment costs. The shift occurs alongside the Reserve Bank of Australia's fourth interest-rate increase this year, pushing the cash rate to 4.6 %, a 15-year peak.

Data reveal that about 7 % of single applicants and 9.8 % of couples using the scheme earn more than $200,000 and $250,000 respectively, with some high earners exceeding $400,000. Since the scheme’s inception in 2020, roughly 320,000 homes have been purchased with the subsidy, half of which occurred after the cap removal.