Saving up for a home deposit is no easy feat – especially with housing affordability being an issue across Australia.
To avoid being charged Lenders Mortgage Insurance (LMI), it’s generally advisable to save a deposit of at least 20%. This 20% deposit is in addition to numerous other upfront costs, such as stamp duty, conveyancing fees and more.
While you wait for your deposit to grow, your dream home could pass you by. This is where the Home Guarantee schemes could help.
In this article we’ll discuss more about the First Home Guarantee, the Regional Home Guarantee and the Family Home Guarantee.
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Previously known as the First Home Loan Deposit Scheme (FHLDS), the First Home Guarantee is a government scheme designed to help first home buyers enter the property market with a low deposit.
Under this scheme, eligible first home buyers are able to purchase a home with a minimum deposit of just 5%. The government guarantees up to the remaining 15% allowing lenders to approve LMI-free home loans for low deposit borrowers.
The scheme has increased its number of places to 35,000 per year, up from 10,000 in 2021.
The general eligibility criteria for the First Home Guarantee is as follows:
Under the First Home Guarantee, buyers can purchase any type of residential property including:
However, the property you purchase must fall under the relevant price cap threshold for your state/territory. Here are the price caps for the 2022-2023 financial year:
|State/territory||Capital city/regional centres||Rest of state|
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The Regional Home Guarantee is very similar to the First Home Guarantee in that it helps rural Aussies with low deposits buy property sooner.
One key difference, however, is that you don’t have to be a first home buyer to apply for the scheme – although you can’t have owned land in the past 5 years. The scheme is available to both Australian citizens and permanent residents.
The Regional Home Guarantee is a new initiative set to provide 10,000 places to regional home buyers. With interest in regional housing markets on the rise, this could help more home buyers consider a move away from the cities.
The Family Home Guarantee is a government program helping eligible single parents with dependent children buy a home with a low deposit.
Under this scheme, eligible applicants can buy a home with a deposit as low as 2%, with the government guaranteeing up to 18%.
Like the Regional Home Guarantee, applicants don’t need to be first home buyers to qualify.
When it was first introduced in the 2021 budget, the government announced 10,000 places over a period of 4 financial years. A further 5,000 places are set to be added in the upcoming financial year.
The general eligibility criteria for the Family Home Guarantee is as follows:
Property price thresholds apply and are the same as the First Home Guarantee. See the table above for more information or use the postcode search tool to find out how much you can spend on a home.
These 3 guarantees could help you own your dream home sooner. If you’d like to find out more about these schemes or your home loan options, book an appointment with a Lendi Home Loan Specialist today.
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The information in this post is general in nature and should not be considered personal or financial advice. You should always seek professional advice or assistance before making any financial decisions.
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Lendi is a privately owned and operated Australian business. Our mission is to change the way Australians get home loans by providing a faster, smarter and more secure home loan experience designed around the customer’s convenience and needs. Although Lendi compares over 1600 products (2,500+ products including feature and pricing variations) from more than 25 lenders, we don't cover the whole market or compare all features and there may be other features or options available to you. Lendi Group Pty Ltd, which is the ultimate holding company of the Aussie and Lendi businesses is owned by numerous shareholders including; banks such as CBA, 1835i (ANZ’s external venture capital partner) and Macquarie Bank, the Lendi founders and employees, and a number of Australian institutional investors and sophisticated investors including UniSuper.
*WARNING: This comparison rate is true only for the example given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. The comparison rates are based on a loan amount of $150,000 over a loan term of 25 years. Fees and charges apply. All applications are subject to assessment and lender approval. Quoted rate applies only to PAYG loans with LVR of 80% or less with security in non-remote areas. All applications are subject to assessment and lender approval.
IMPORTANT INFORMATION: Loan terms of between 1 Year and 40 Years are available subject to lender and credit criteria. Maximum comparison rate will not exceed 14.99% (see comparison rate warning above). Any calculations or estimated savings do not constitute an offer of credit or a credit quote and are only an estimate of what you may be able to achieve based on the accuracy of the information provided. It doesn't take into account any product features or any applicable fees. Our lending criteria and the basis upon which we assess what you can afford may change at any time without notice. Savings shown are based on user inputted data and a loan term of 30 years. All applications for credit are subject to lender credit approval criteria. Top rates include lenders who are on our panel and are then defined by the circumstances provided by the borrower.
The Lendi Group Pty Ltd, which is the ultimate holding company of the Aussie and Lendi businesses is owned by numerous shareholders including; banks such as CBA, 1835i (ANZ’s external venture capital partner) and Macquarie Bank, the Lendi founders and employees, and a number of Australian institutional investors and sophisticated investors including UniSuper.
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