The Average First Home Buyer Loan Reached $610,063, Up Almost $50,000 Since the Scheme Expanded. Primara Puts Break-Even on the Upfront Benefit at 13.7 Years

A year on from the expansion of the First Home Guarantee, the clearest measurable change is not how many first home buyers are in the market. It is how much each one is borrowing. Primara Research puts the average first home buyer loan at $610,063 in June 2026 — up about $49,800, or 8.9%, since income caps and place caps came off on 1 October 2025 — while Australian Bureau of Statistics commitments data shows buyer numbers going sideways. For brokers, a scheme that lifts capacity without lifting volume is a recommendation problem, not a marketing opportunity.

What the Primara numbers actually show

Primara Research, analysing ABS Lending Indicators, reports that the average first home buyer loan reached $610,063 in June 2026. That is an increase of roughly $49,800 — about 8.9% — since the First Home Guarantee was opened to all eligible first home buyers on 1 October 2025, when the Commonwealth removed the income caps that had excluded singles earning $125,000 or more and couples above $200,000, removed the cap on places, and lifted property price caps in most capitals.

Over the same comparison period, Primara puts the increase in non-first home buyer loan sizes at 4.4%. First home buyer lending grew 3.3% in the year to June 2026 against 1.9% for the rest of the market — which Primara describes as the first positive result for the segment since September 2024.

The counterweight sits in the volume data. Primara says seasonally adjusted first home buyer loan numbers are 2.3% below the pre-expansion quarter and 39.9% below the June 2009 peak of 50,097. The ABS release for the June quarter 2026, published on 14 August, independently records 29,319 first home buyer owner-occupier commitments — down 2.9% on the March quarter 2026 and flat on the June quarter 2025 — against a value of $18.4 billion, up 10.0% year on year.

That is not, on its own, evidence that the scheme caused the increase. Primara’s figures describe an association over a period in which price caps rose sharply, dwelling values moved, and the cash rate climbed. But the direction is consistent, and it is the version of the scheme brokers are now sitting across the desk from.

One quarter did almost all the work

The shape of the increase matters more than the headline. Primara reports that the December 2025 quarter — the first full quarter after the expansion — produced an 8.5% rise in average first home buyer loan sizes, which it describes as the strongest single-quarter increase since the series began in September 2002. Across the following two quarters, growth was 0.4%.

So this was a step change, not a trend. Capacity reset once, quickly, and then stopped. For brokers, that has a practical consequence: the comparison you ran for a client in late 2025, when the step was happening, described a different market from the one the same client is buying into now. The capacity is still there. What has changed underneath it is the cost of using it.

The trade-off now has a price on it

The useful part of Primara’s work for brokers is that it attaches numbers to both sides of the decision rather than only to the attractive one.

On Primara’s modelling, the scheme’s upfront benefit is worth about $96,000 — the reduction in what a buyer has to put in on day one, through a smaller deposit and no lenders mortgage insurance premium. Against that, the larger loan costs roughly $587 a month more over a 30-year term. Primara puts the break-even point at 13.7 years.

Drennan also said first home buyers are “keeping pace with the market for the first time in two years”, and noted that not every first home buyer using the scheme is in the same position. Some buyers never had the larger deposit, so the extra $587 comes out of an already tight budget. Others had the savings and chose to borrow more, keeping cash on hand.

Those are two materially different clients producing the same loan structure — and that difference is exactly the sort of thing a file note has to capture rather than assume.

Four rate rises have moved the arithmetic

Primara’s finding that rate rises have already eroded more than a third of the upfront benefit is the part most likely to catch brokers out, because it quietly invalidates work that was correct when it was done.

The Reserve Bank raised the cash rate target by 25 basis points to 4.60% on 29 September 2026 — the fourth increase of 2026 and, as the ABC reported on the day, the highest level in 15 years. In its statement, the Board said inflation “remains elevated and some of the upside risks flagged in August are materialising”, and that “a further tightening in financial conditions is warranted to support a return of inflation to target in a reasonable period”. The decision was unanimous, and the Board said it “will continue to do what it considers necessary to bring inflation sustainably back to target, including increasing the cash rate target further if needed”.

A break-even calculation is a function of the rate on the extra debt. Every increase pushes it further out. Any scheme-versus-non-scheme comparison built before February 2026 was modelled on a cash rate a full percentage point lower, and a pre-approval written on that basis is describing a trade-off that no longer exists.

Where this lands on your file

ASIC published Report 840 on 13 October 2026, following a review of 13 credit licensees making up eight large mortgage broker groups — aggregator groups covering roughly two-thirds of broker representatives in Australia — using data from 1 April 2023 to 31 March 2025.

Two findings from ASIC’s media release bear directly on scheme files. Seven of the eight aggregator groups reported that brokers did not recommend the cheapest loan option in more than 20% of cases. And ASIC said it found instances where brokers lacked clear evidence to support recommending a higher-cost loan.

A scheme recommendation is not usually framed as a higher-cost recommendation — it is framed as a saving. But on Primara’s numbers, a client who could have waited and saved a larger deposit, and who holds the property for less than 13.7 years, pays more under the scheme than without it. That is a cost difference, and a sizeable one.

Nothing here says the scheme is the wrong call. For a client who cannot realistically reach a 20% deposit before prices and rents move again, getting in with 5% and no LMI premium may be plainly in their interests, and the alternative may be no purchase at all. The point is narrower: it is a judgement, it has a cost attached, and the reasoning belongs on the file rather than in the broker’s head.

The WA exception — and why state matters

Primara reports that first home buyer loan growth outpaced the broader market in seven of eight jurisdictions. Western Australia recorded the largest increase in loan sizes, at 16.0%, and was the only jurisdiction where first home buyer numbers fell.

That combination is worth sitting with. A 16% rise in loan size alongside a fall in buyer numbers is not a market where more people are buying — it is a market where the people still buying are stretching further. WA also had one of the sharper price cap increases under the October 2025 changes, from $600,000 to $850,000.

For brokers writing in WA, or in any market where the cap moved a long way, the question to carry into the appointment is whether the cap is functioning as a ceiling the client is being pulled toward. A cap is a maximum, not a target, and the gap between what a client can borrow under the scheme and what they should borrow is the part of the conversation that generates the file note.

What to review this week

A scenario worth running before your next appointment

Take a couple with $60,000 saved, looking in a market where the scheme cap comfortably covers their target price. Under the scheme they can proceed now, with no LMI premium. Saving to 20% on the same property would take them several years, over which the target price is unlikely to hold still.

Run both paths and write down three things: what the repayment difference is at today’s rate, what it becomes if the rate moves another 50 basis points, and how long the couple say they expect to hold the property. If their stated horizon is five to seven years and the break-even on the extra borrowing runs past a decade, that is not automatically a reason to steer them away from the scheme — their alternative may be worse. It is a reason to have said so, in writing, at the time.

That is the whole discipline. Primara has given the industry a usable frame for a decision brokers were already making intuitively. The value of the frame is that it turns an instinct into something a file can show.

Where this goes next

Two things are worth watching. The first is whether the step change holds: if loan sizes have genuinely reset rather than drifted, the December 2025 quarter will stay an outlier and subsequent quarters will stay flat. The second is rates. The RBA has said explicitly that it will raise further if needed, and each increase lengthens the payback on every scheme loan already written.

Neither changes whether the scheme is worth using. Both change the maths you should be showing clients — and the maths your file should be able to reproduce.

Sources: Primara Research analysis of ABS Lending Indicators, as reported by The Adviser (19 October 2026) and Elite Agent; ABS, Lending Indicators, June Quarter 2026 (released 14 August 2026); Reserve Bank of Australia, Statement by the Monetary Policy Board, 29 September 2026; ABC News, 29 September 2026; ASIC media release 26-240MR and Report 840, 13 October 2026; ABC News coverage of the Home Guarantee Scheme expansion, September 2025.