- Key Takeaways:
- What does the Home Loan Guarantee Scheme involve?
- Who is eligible for the Home Loan Deposit Scheme?
- What property price caps does the Home Loan Deposit Scheme Cover?
- Property Price Cap Table
- How many people can apply for the Home Loan Guarantee?
- How can I apply for the Home Loan Guarantee?
- FAQs
Key Takeaways:
- Budget 2022 expanded the number of places available on the Home Guarantee Scheme.
- The scheme has been expanded past the original July 2022 end date.
- First Home Guarantee allows first home buyers to pay a 5% deposit without the need to pay LMI.
- Family Home Guarantee Scheme enables single parents to pay a 2% deposit without paying LMI.
- Home buyers purchase a home sooner!
This scheme aims to benefit first home buyers and single-parent home buyers.
Here, we tell you everything YOU need to know about the expanded Home Guarantee Scheme.
What does the Home Loan Guarantee Scheme involve?
The Home Loan Guarantee Scheme provides an easier route to buying a property for eligible individuals. Those eligible can apply for a home loan without the recommended 20% deposit.
First Home Guarantee
The First Home Guarantee allows eligible first home buyers to apply for a home loan with only a 5% deposit. Usually, homebuyers with a deposit of less than 20% will be required to pay Lenders’ Mortgage Insurance.
Lenders’ Mortgage Insurance
LMI is a mortgage insurance policy to cover your repayments for the lender if you stop paying the home loan debt. LMI is a significant monthly payment for many families and means that a low deposit home loan is usually out of reach.
The home loan deposit scheme changes this. Eligible first home buyers who qualify for the scheme can seek a guarantee from the government. The government guarantees the remaining 15% deposit so that LMI payments are not required.
This government guarantee scheme is a great solution for first home buyers struggling to save a 20% deposit! They can purchase their own home faster, providing security for their families.
First Home Owner Grant
You could also see what other first home buyer incentives are available such as the First Home Owner Grant. The First Home Owner Grant may allow eligible first-time home buyers a $10,000 grant, although this varies depending on state and territory.
You may be able to apply for the Home Super Saver Scheme. The Home Super Saver Scheme helps you save for your deposit.
Family Home Guarantee
The Family Home Guarantee Scheme is a subsidiary of the Home Guarantee program. Under this scheme, single-parent families can also forget the usual 20% home loan deposit! A participating lender will allow eligible single parents to place a 2% deposit on their home. Again, no LMI payments are required, keeping monthly expenses low.
The government guarantees the remaining 18% deposit for eligible single parents. The Family Home Guarantee Scheme is not limited to first homes, offering greater flexibility. This allows families to ensure they have a secure roof over their heads.
Regional Home Guarantee
This scheme has also been extended to regional Australians who can apply to pay a 5% deposit under the Regional Home Guarantee. This scheme is open to permanent residents in regional Australia and is not limited to new residential property.
Who is eligible for the Home Loan Deposit Scheme?
First home buyers, single parents, and regional residents may have eligibility for the Home Loan Deposit Scheme. Specific eligibility criteria must be met when applying for the scheme.
First Home Guarantee
This scheme is open to Australian citizens. You must not earn above $125,000 as a single applicant or $200,000 as a joint applicant.
You must be a first-time buyer and cannot have owned a house yet.
Family Home Guarantee
The Family Home Guarantee is open to single parents whose legal child lives with them. Your total earnings can not surpass $125,00 per year. However, this does not include any child maintenance payments you receive.
You must also be an Australian citizen to be fully eligible.
Regional Home Guarantee
To be eligible for the Regional Home Guarantee, you must be a permanent resident wanting to purchase a residential property in regional Australia.
What property price caps does the Home Loan Deposit Scheme Cover?
Property price caps for the Home Loan Deposit Scheme vary from state and territory. Each location has a capital city and regional centre price cap and a separate price cap for the remainder of the area.
The thresholds have risen considerably from last year to acknowledge the surging Australian property market. Reflecting the realised property market, thresholds are higher in the city and regional centres than in the remainder of the state.
Property Price Cap Table
Here are the maximum property prices applicable to each state or territory when applying the Home Guarantee Scheme:
[table id=11 /]As well as purchasing a home under these territory government thresholds, you could be eligible to buy house and land packages. You can use one separate contract to take care of the whole new build and get the home that you want sooner.
How many people can apply for the Home Loan Guarantee?
The government has expanded the scheme to allow 50,000 people per year to enjoy the Home Loan Deposit Scheme benefits.
This total is split into 35,000 spots for the First Home Guarantee for first home buyers, followed by 5,000 places for the Family Home Guarantee. Finally, 10,000 people can reap the rewards of the Regional Home Guarantee.
You can read more about Home Loan Deposit Scheme eligibility and download a fact sheet from the National Housing Finance and Investment Corporation.
How can I apply for the Home Loan Guarantee?
You can only apply for the Home Loan Deposit Scheme when you contact a participating lender. Talk to an experienced broker at Lendstreet to check your eligibility and apply for your home loan using the scheme.
Our experts can help you discover your precise eligibility and find an approved lender to begin your Home Loan Guarantee approval process.
Contact Lendstreet today while Home Loan Guarantee places are available!
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FAQs
Is the Home Loan Guarantee Scheme due to end?
The scheme was due to end in July 2022, although the government has decided to extend this date! The scheme will now continue into next year for new home buyer purchases!
This is due to the Home Loan Guarantee Scheme’s popularity and the increase in house prices. As the property market surged, owning a home was becoming more and more a distant dream. However, now many more Aussies can get a step on the property ladder!
How many places are available on the expanded Home Loan Guarantee Scheme?
There are 50,000 new places available on the Home Loan Guarantee Scheme, divided into three categories
- 35,000 places for the Forst Home Guarantee.
- 10,000 spots for the Regional Home Guarantee.
- 5,000 places for the Family Home Guarantee.
How much deposit do I need using the Home Loan Guarantee?
If you are eligible for the First Home Guarantee or the Regional Home Guarantee, you only need a 5% deposit. If you want to buy a home for $600,000, you will only need a $30,000 deposit. If saving for the standard 20% deposit, you would need a staggering $120,000!
If you are eligible for the Family Home Guarantee, you only need a 2% deposit. On a similarly priced home, you will only need $12,000 for your deposit!
Visit Lendstreet to assess your eligibility and search for your participating lender.
Schedule a call to one of our expert mortgage broker
Ask our expert mortgage brokers anything about home loans.
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