Amidst all the buzz about the cash rate and refinancing, another important topic deserves our attention: the Home Guarantee Scheme (HGS). This month, the National Housing Finance and Investment Corporation (NHFIC), together with the Commonwealth Bank (CBA), released key data demonstrating the outcome of the Home Guarantee Scheme over a 4-year period. Their findings are all very encouraging. Let’s take a look at what this report is all about.

Participants’ Equity Positions Continue to Grow

In the dynamic landscape of fluctuating property values and the unpredictable rise and fall of interest rates, the Home Guarantee Scheme (HGS) is proving to be an effective tool for first home buyers to grow home equity. The data in the latest report from the National Housing Finance and Investment Corporation (NHFIC), together with a leading lender, shows that participants under the HGS have not only weathered these challenges but have also experienced a substantial growth of about $82,000 in property equity since the program’s inception in 2020. This outcome speaks volumes about the determination of these participants, who, with the strategic support provided by the HGS, have confidently navigated the path to homeownership, ultimately emerging stronger and more secure.

Home equity built over time according to the NHFIC report

NHFIC’s First home buyer insights – collaboration with CBA | August 2023.

Resilience Amidst Challenging Situations

Despite the challenging interest rate environment and dwelling price falls last year, it is encouraging that the (average) equity position of Home Guarantee Scheme participants appears to be holding up. It is also interesting that deposits for first home buyers outside of the HGS have risen so strongly, which may indicate they have other ways of supplementing their savings.

This is the statement of NHFIC’s Head of Research, Hugh Hartigan, in their latest press release dated 21 August 2023.

The outlook for the current financial year is promising, so first home buyers planning to finally enter the property market should be mindful of how the entire HGS program works.

The Three Pillars of HSG

Under the Home Guarantee Scheme (HGS) landscape, there are three different programs, tailored to assist first home buyers enter the property market sooner and with ease:

1. First Home Guarantee (FHBG): Through this program, the NHFIC guarantees a portion of the first home buyer’s loan with a participating lender. The NHFIC can guarantee up to 15% of the property’s value, but this guarantee is not a cash payment or a deposit for your home loan.

You still need to pay the deposit, but another salient feature of this program is that you can pay as low as 5% deposit without having to pay Lenders Mortgage Insurance (LMI). The First Home Guarantee can also be used in conjunction with the First Home Super Saver Scheme and other state and territory first home owner grants and stamp duty concessions.

This financial year, another 35,000 slots are available.

2. Regional First Home Guarantee (RFHBG): This program works very similarly to the First Home Guarantee, except it is for eligible first home buyers who have lived in a regional area during the preceding 12-month period or in an adjacent regional area. Interested applicants may check whether their suburb is listed as a regional area here.

It is important to note that if you are eligible for the RFHBG, you do not qualify for the First Home Guarantee. Home buyers who are not eligible for the RFHBG meanwhile, may qualify for the First Home Guarantee or the Family Home Guarantee.

The Regional First Home Guarantee offers 10,000 slots this financial year, so you should lodge your application on or before 30 June 2024.

3. Family Home Guarantee (FHG): The benefits of this program is meant for single parents and guardian of at least one dependent. Unlike the FHBG and the RFHBG, which allows a 5% minimum deposit for a home loan, the Family Home Guarantee instead allows 2%, which further eases the situation of individuals struggling to buy a home.

Another noteworthy feature of this guarantee is that it can be used by first home buyers or next home buyers, just as long as they are eligible and owner-occupiers. Property investors are not covered.

The FHG offers 5,000 slots only up until the end of June 2024.

Why I think this is an outstanding report

Most first home buyers struggle with deposit. Typically, we associate this with low savings and low income. But in this report, we see that incomes have risen at a faster pace for those accessing HGS compared with the broader first home buyer market.

Average gross household salary income according to the NHFIC report

NHFIC’s First home buyer insights – collaboration with CBA | August 2023.

This is good news!

On the other hand, and as further highlighted in the NHFIC report, participants of the Home Guarantee Scheme are borrowing less in relation to their income. Even if they have become eligible to borrow more, they are choosing to borrow less. The average loan amount under HGS increased by 4.7% only since 2020, while the average loan for the broader FHB market increased by a larger amount (13.4%) over the same time period.

Average loan amount and deposit paid according to the NHFIC report

NHFIC’s First home buyer insights – collaboration with CBA | August 2023.

Another good news!

I am seeing consistent growth in first home buyers’ financial capacity. Higher income plus the capacity to pay more towards their house shows that first home buyers are a formidable group.

That is why my mission to assist first time buyers navigate the home buying process and take significant steps up the property ladder is one mission I take very seriously. Their resilience and determination amaze me, and as players in this tumultuous time in the property market, these are two traits we all need to practice more.

If you are a first home buyer, please take advantage of the Home Guarantee Scheme. Read more, ask more, learn more. Equip yourself with data and update yourself on property market movements. Look out for experts’ insights, and if you need help interpreting information, seek professional advice. If you need one, do not hesitate to reach out. I am available here on LinkedIn or through email at

Thank you for reading my article. Until next time.

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