RBA has increased interest rates get mortgage refinance advice HERE

Home / Blog

Table Content

The First Buyers Home Guarantee Scheme – What You Need To Know

First-Buyers-Home-Guarantee-Scheme

What is the First Buyers Home Guarantee Scheme? 

Before buying a House in Australia, we recommend you to know more about the First Buyers Home Guarantee Scheme.

With the majority of lenders asking borrowers to save a 20% deposit to be approved for a loan the dream of owning a home in most Australian cities and large regional hubs, like Cairns, is becoming less attainable. Although some lenders will accept deposits as low as 5%, a deposit of less than 20% will typically require the borrower to pay Lenders Mortgage Insurance (LMI), which is an up-front cost (in addition to stamp duty, legal fees and lending fees). 

 

First Buyers Home Guarantee Scheme

 

The First Buyers Home Guarantee is a government mechanism designed to assist people to purchase their first home by asking borrowers to save just a 5% deposit. The government will guarantee up to 15% of the loan so it will be exempt from LMI. This government guarantee can save the borrower tens of thousands of dollars and, in conjunction with other first home buyer benefits, can bring that first step on the property ladder within comfortable reach.  

 

Why was the First Home Guarantee Scheme extended?

 

The conditions surrounding Australia’s housing prices and availability are described as a crisis on a daily basis, with an increasing amount of young families stuck in a cycle of renting and being unable to save or missing out on appropriate properties to experienced, cashed-up investors. In an effort to help empower more first home buyers to enter the market the scheme was extended and between 1 July 2022 – 30 June 2023, in which time 35,000 places will be available to eligible first home buyers. 

 

Am I eligible for the First Buyers Home Guarantee Scheme? 

 

Not all potential purchasers will be eligible for the First Home Guarantee Scheme. There is a range of criteria that must be met, including: 

  • being a single applicant who earns less than $125,000 per year or a couple (purchasing the same property together) earning a combined maximum of $200,000 per year; 
  • having the intention to live in the property that is being purchased; and  
  • not previously owning all or part of a property in Australia. 

You should speak to your mortgage broker, lender or conveyancer to ensure you comply with all eligibility requirements prior to applying for the Scheme. 

 

Saving a 5% deposit is still out of my reach. Do I have any options? 

 

If you are a single parent you may also be eligible for the Scheme with a deposit of only 2%. If you are re-entering the market as a single parent you may also be eligible despite having owned property (or a share in a property) previously. 

 

single parent

 

Are there any other government schemes available to people buying a home? 

 

In addition to the First Home Guarantee Scheme, the government has introduced the Regional First Home Buyer Support Scheme. Under this Scheme, 10,000 places will be offered to purchasers looking to buy or build a home in regional areas of Australia. The most unique aspect about the Regional First Home Buyer Support Scheme is that non-first home buyers will be eligible as will permanent residents, providing they meet other criteria, including having resided in the regional area in which they are looking to purchase for at least 12 months. 

The government will guarantee up to 15% of loans under the Scheme, meaning purchasers may be ready to buy with a deposit of as little as 5% and will not have to pay Lenders Mortgage Insurance on the loan.   

Residents of Far North Queensland can benefit from the Regional First Home Buyer Support Scheme, including those living in Cairns, which is considered ‘regional’ under the Scheme. 

The Regional First Home Buyer Support Scheme will commence on 1 October 2022. 

 

First-Buyers-Home-Guarantee-Scheme

GET YOUR LOAN PRE-APPROVAL LETTER
By Lauren Eakins

Are you looking to buy a house now?

Shop with confidence today! Get your pre-approval to know your budget, so you don’t miss any opportunities.

Pre-approval letter for your loan lasts 90 days.

Let's start the process today.
Get a free Assessment





    are you ready to start the Process today?

    With years of experience you can rest assure we have what it takes to match you with a competitive loan. Our team will support you by understanding your needs, offering local property market advice and managing your loan process from start to finish.





      CAIRNS LATEST PROPERTY GROWTH BY SUBURB

      CAIRNS LATEST PROPERTY GROWTH BY SUBURB

      Find out the latest price action in the Cairns property market by suburb. Get the full list today.