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Government schemes and grants for first homebuyers

08 August 2023
• 8 minute read
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Government schemes and grants for first homebuyers

Navigating the complex world of mortgages and property ownership can be challenging. Fortunately, the Australian Government offers support to make life easier for those looking to buy a first home.

In this article, we'll talk through the Australian Government schemes and grants available for first homebuyers and families so you can see whether you’re eligible.

Plus, if you're looking to take the next step towards homeownership, we’ll show you how Great Southern Bank can help you get started.

First Home Guarantee

The First Home Guarantee allows eligible homebuyers to purchase a new or existing home with a deposit as low as five per cent of the property's value without the need to pay Lenders’ Mortgage Insurance (LMI). LMI is usually required when the buyer’s deposit is less than 20 per cent of the purchase price. It protects the lender in case the borrower defaults on their loan. There’s a limit to how many people can access the Guarantee.

First Home Guarantee eligibility requirements

To be eligible for the First Home Guarantee, you must:

  • Be a first homebuyer or someone who hasn’t owned a property in Australia in the past 10 years.
  • Be either a single applicant or two applicants. Friends, siblings, partners or other family members can apply together.
  • Be an Australian citizen or permanent resident.
  • Have a taxable income of up to $125,000 per year for individuals or up to $200,000 per year for couples.
  • Have saved a deposit of at least five per cent of the property's value.
  • Purchase a property with a value of up to the maximum property price cap in your state or territory.

How do you apply?

To apply for the First Home Guarantee, you'll need to:

  • Check your eligibility on the Housing Australia website.
  • Be purchasing a property with a value of up to the maximum property price cap in your state or territory.
  • Find a participating lender, such as Great Southern Bank, who can provide you with a First Home Guarantee-backed loan.
  • Apply for a home loan and receive approval from your lender.
  • Have your lender make an application to reserve your place in the First Home Guarantee Scheme.

Milestones made easier for Annaleise and Jake

Annaleise and Jake had been saving for two and a half years to buy their first home in Dalby, Queensland. After six months of searching, they finally found their perfect match - a recently renovated three-bedroom home with a big yard for their Jack Russell, Tucker.

Despite some serious saving, the couple were still resigned to paying Lenders’ Mortgage Insurance (LMI) until they learned about the First Home Guarantee. This allowed them to buy their first home with more flexibility in terms of their required deposit. It also meant that they didn't have to worry about LMI.

Better yet, Annaleise says they can now prepare for the most exciting moments in life: "Owning a home means more stability for us. Renting came with a lot of unknowns with lease renewals and rent increases. We can now look ahead to planning our wedding for 2024."

Regional First Home Buyer Guarantee

The Regional First Home Buyer Guarantee (RFHBG) is an Australian Government initiative that helps eligible homebuyers already living regionally to purchase a home in their area with a deposit as low as five per cent of the property's value without the need to pay LMI. Better yet, eligible regional first homebuyers can use the RFHBG in conjunction with other government programs like the First Home Super Saver Scheme or state and territory-specific first homeowner grants and stamp duty concessions.

Regional First Home Buyer Guarantee Scheme eligibility requirements

To be eligible for the Regional First Home Buyer Guarantee, you must:

  • Be a first homebuyer, or a homebuyer who hasn’t owned a property in Australia in the past 10 years but has lived in the region or adjacent region you are purchasing in for at least 12 months prior to your application. You can check this on the Housing Australia website.
  • Be applying as either a single applicant or two applicants. Friends, siblings, partners, or other family members can apply together.
  • Be an Australian citizen or permanent resident.
  • Have a taxable income of up to $125,000 per year for individuals or up to $200,000 per year for couples.
  • Have saved a deposit of at least five per cent of the property's value.
  • Be purchasing a property with a value of up to the maximum property price cap in your state or territory.

How do you apply?

To apply for the Regional First Home Buyer Guarantee, you'll need to:

  • Use the Regional Checker function on the Housing Australia website to make sure you’re eligible to purchase in your intended suburb or postcode.
  • Be buying an eligible property within the property price threshold for your area. You can view the property price cap for your suburb on the Housing Australia website.
  • Find a participating lender, such as Great Southern Bank, who can provide you with a Regional First Home Buyer Guarantee-backed loan.
  • Apply for a home loan and receive approval from your lender.
  • Have your lender make an application to reserve your place in the Regional First Home Buyer Guarantee.

Big dreams achieved in Broken Hill: Isobella and Keenan’s story

Broken Hill is about as regional as it gets – and for local young couple Isobella and Keenan, they had already dreamed of laying down roots in their hometown.

As small business owners, they watched house prices rise with concern. But the launch of the Regional First Home Buyer Guarantee enabled them to take the next step. Isobella and Keenan used the Guarantee and a loan from Great Southern Bank to buy a historic home with a sprawling backyard, which they plan to renovate sooner than they ever expected.

“I have always loved the sense of community that comes with living in a rural town. Not to mention the convenience of never driving more than 10 minutes to where you need to go,” Isobella said.

“We bought an older-style three-bedroom home with great foundations and so much potential. One of our favourite features would be the heritage stylings like the beautiful cornice throughout the house as well as the open fireplace in the living room.”

Family Home Guarantee

The Family Home Guarantee (FHG) allows eligible single parents and legal guardians with at least one dependent to purchase a home with a deposit as low as two per cent of the property's value. The Australian Government will act as a guarantor for up to 18 per cent of the remaining value of the loan, allowing the homebuyer to avoid paying Lenders’ Mortgage Insurance (LMI).

Family Home Guarantee eligibility requirements

To be eligible for the Family Home Guarantee, you must:

  • Be an Australian citizen or Australian Permanent Resident, at least 18 years of age, and have a taxable income of up to $125,000 per annum.
  • Be a first homebuyer or a previous homeowner who does not currently own property.
  • Be a single parent or single legal guardian with at least one dependent child. You won’t be eligible if you’re in a de facto relationship, married or separated.
  • Have at least two per cent of the property’s value as a deposit.
  • Be buying an eligible property within the property price threshold for your area. You can view the property price cap for your suburb on the Housing Australia website.

How do you apply?

Applications for the Family Home Guarantee can be made through participating lenders such as Great Southern Bank. Once you find a participating lender, they will assess your eligibility for the scheme and help you with your application.

If you're a single parent or single legal guardian with at least one dependent child, the Family Home Guarantee can be a great way to get into the property market. With a low deposit and the government acting as a guarantor, you could save thousands of dollars in LMI.

What about the states and territories?

Depending on where you live, there are various state or territory-run schemes that could help you take the next step to homeownership. First Homeowner grants are offered by most states and are probably the most well-known, one-off state government support available to first-time purchasers of newly built, never-before-lived-in homes.

While every state has its own set of rules, grants can total many thousands of dollars and most have strict property value thresholds. While this can limit their use in expensive locations such as inner Melbourne or Sydney, they’ll go a long way if you’re looking to buy in an outer suburb or regional area.

There are also various concessions available for stamp duty, which remains one of the largest upfront costs for first homebuyers.

Ready to buy your first home?

Now that you know more about the various government schemes available to assist first homebuyers, you may realise you’re ready to start your homebuying journey.

Great Southern Bank offers a range of home loans and government support grants to suit your needs. By making clever strategic decisions and exploring all the support available, you could shorten the time it takes to save up for a deposit by up to a decade.

So, if you're dreaming of owning your own home, why not give us a call on 133 282? Alternatively, you can always pop into your local branch for a chat.

Important Information

Great Southern Bank, a business name of Credit Union Australia Ltd ABN 44 087 650 959. AFSL and Australian Credit Licence 238317. Conditions, fees and charges apply. This is general information and does not take into account your objectives, financial situation or needs. Consider the appropriateness of the information, including the Terms and Conditions (T&Cs) booklet, before acting on it. The Financial Claims Scheme may apply to this product; refer to the T&Cs for more information.

More information about the Home Guarantee Scheme (including the First Home Guarantee, Family Home Guarantee and Regional First Home Buyer Guarantee) and Housing Australia is available at www.housingaustralia.gov.au.

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