There are numerous components to the ‘Home Guarantee Scheme’ which aims to get different groups of buyers into the housing market sooner. We want to simplify this scheme for the everyday person and help you understand how it could positively impact your chances of buying a home.
Read on for all the details and/or enter your details in the enquiry box to the right to discuss the scheme with one of our friendly home loan experts.
The First Home Gaurantee will allow First Home Buyers to purchase or build a home with a deposit as little as 5% and avoid paying Lenders Mortgage Insurance (LMI is a large cost usually associated with loans above 80% of the purchase price).
The Government will act as a guarantor providing a ‘guarantee’ for up to 15% of the purchase price and is the reason you won’t be required to pay Lenders Mortgage Insurance.
The First Home Guarantee is essentially an extension and combination of the First Home Loan Deposit Scheme (FHLDS) and the New Home Guarantee which were first introduced in 2020.
The major difference is that the First Home Guarantee scheme applies to both purchases of established homes and construction of new builds.
The Regional Home Gaurantee provides the same Guarantee as the First Home Guarantee. It will allow either regional buyers (who have not owned a home in the last 10 years) or First Home Buyers to purchase a new home or build a home with a deposit as little as 5% and avoid paying Lenders Mortgage Insurance.
As above, the Government will act as a guarantor providing a ‘guarantee’ for up to 15% of the purchase price.
The Family Home Guarantee varies slightly from the two above as it allows single parents to purchase a home with a deposit as little as 2% and avoid paying Lenders Mortgage Insurance.
Under this scheme the Government will provide a ‘guarantee’ for up to 18% of the purchase price, meaning you only need a minimum 2% deposit plus costs.
Under all three Guarantee’s within the scheme:
Scheme eligibility will also be capped based on the purchase price that will vary depending on the region.
The purchase price caps that will apply during the 2023-24 financial year are as follows:
NSW
Capital city and regional centres – $900,000
Rest of state – $750,000
Victoria
Capital city and regional centres – $800,000
Rest of state – $650,000
Qld
Capital city and regional centres – $700,000
Rest of state – $550,000
WA
Capital city and regional centres – $600,000
Rest of state – $450,000
SA
Capital city and regional centres – $600,000
Rest of state – $450,000
Tasmania
Capital city and regional centres – $600,000
Rest of state – $450,000
ACT
Capital city and regional centres – $750,000
NT
Capital city and regional centres – $600,000
Jervis Bay Territory and Norfolk Island – $550,000
Christmas Island and Cocos (Keeling) Islands – $400,000
