As we enter the new financial year, new spots have become available for the First Home Guarantee. This Government Initiative, formerly known as the First Home Loan Deposit Scheme, supports first-time homebuyers to enter the property market by purchasing a new or existing home with a deposit as little as 5%.
As the First Home Guarantee has been revised, it is important you understand any eligibility requirements that may have changed. We go over everything you should know.
Understanding How First Home Guarantee Works
In the Federal Budget of 2022, the Government renamed the scheme the First Home Guarantee, previously called the First Home Loan Deposit Scheme. The government has also expanded places in the scheme to 35,000 guarantees per year from the 2022/23 financial year, up from 10,000 places annually.
As of 1 July 2022, the First Home Guarantee will support 35,000 Australians in purchasing their first home. Prior to July 2022, there was only 10,000 spots available.
What is the First Home Guarantee?
The First Home Guarantee ensures that eligible homebuyers are supported by the Government by making it easier to enter the property market. By using the First Home Guarantee with your first home, you are able you purchase your first home sooner with a smaller deposit and without being required to pay Lender’s Mortgage Insurance.
Eligible first-time homeowners can use the First Home Guarantee in conjunction with other Government Initiatives including the First Home Owners’ Grant and Stamp Duty Concession.
There is no costs or repayments associated if you apply for the First Home Guarantee. However, you must ensure you meet all your lender’s requirements for the home loan associated with the Guarantee.
Are you eligible for the First Home Guarantee?
To be eligible for the First Home Guarantee:
- You must be an Australian Citizen who is at least 18 years old.
- This must be your first property purchase and must be your principal place of residency once you have purchased the house. The First Home Guarantee is not available for investment properties.
- You can apply by yourself or with another purchase for the First Home Guarantee. If you are applying with someone, you must be in a de-facto relationship or married to each other as it is only available for two applicants in a couple. If you are looking to purchase with a parent, sibling, cousin or friend will not be eligible.
This Guarantee will only assist future homeowners if they have 5% of the value of the eligibility property saved as a deposit.
If you have less than 5%, you will be ineligibility for the First Home Guarantee. However, if you are a single parent, you may be eligible for the Family Home Guarantee.
For more information on eligibility for the First Home Guarantee, check NHFIC website.
What types of properties can be purchased?
For the property to be eligible, it must be:
- A residential property
- Eligible established homes including a house, townhouse or apartment
- For a brand new home, eligible properties include a home & land package
- Land and separate contract to build a home
- An off-the-plan townhouse or apartment
You may purchase an established home or a brand new home depending on your financial ability.
The First Home Guarantee will assist home purchases that are within the relevant price cap for the area in which it is located. The price cap for capital cities, large regional centre, regional areas and territories are:
How To Apply for the First Home Guarantee
The National Housing Finance and Investment Corporation has selected banks are able to support the First Home Guarantee.
To apply for the First Home Guarantee, you must apply through your authorised representative (a bank or mortgage broker) as the NHFIC does not approve or process the applications.
If you’d like a free eligibility assessment to see if you qualify for the First Home Guarantee, click here.