If you’re a first home buyer looking to enter the property market, you’ve probably heard of the Australian Government’s First Home Guarantee – known in a previous iteration as the First Home Loan Deposit Scheme.
The First Home Guarantee is one element of the Government’s Home Guarantee Scheme, which expanded in 2022 to also include the Regional First Home Buyer Guarantee and the Family Home Guarantee.
So how can all this help you buy that dream home? From July 1 this year, the Albanese Labor Government is expanding the eligibility criteria for all three Guarantees, giving even more people an opportunity to own property in an always-changing market.
Read on for a breakdown of how it all works.
Changes to First Home Guarantee and Regional First Home Buyer Guarantee
Currently, only individuals and couples (married or de facto) can apply for the First Home Guarantee and Regional First Home Buyer Guarantee.
However, from July 1, friends, siblings, and other family members will be eligible for joint applications under these Guarantees. If you and a friend have dreams to pitch in together on a property, now’s the time to get planning.
“We know friends and family members are already teaming up to secure their own place to call home,” Minister for Housing Julie Collins said in a statement. “Our actions will allow them to access vital assistance, just as couples have been able to previously.”
Another big change is that both Guarantees will also be available to non-first home buyers who haven’t owned a property in Australia in the last ten years. This expansion has been introduced to support those who have fallen out of homeownership as a result of financial crisis or a relationship ending.
Under these Guarantees, the federal government acts as guarantor so you can buy a house with a deposit as low as 5% (and up to 20%) of the value of an eligible property, without paying Lenders Mortgage Insurance (LMI).
Home buyers can purchase a new or existing residential property, so anything from an off-the-plan apartment to an existing townhouse to a house and land package is eligible.
It’s important to note that these Guarantees are only available through an authorised panel of participating lenders, which you can find here. Make sure to find out what each lender offers; for example, NAB will allow you to borrow over 80% of the purchase price without paying LMI.
There are other important things to consider too, such as the maximum purchase prices for each state and capital cities/regional centres vs. all other regional areas (see the breakdown of property price caps, and a helpful postcode search tool, right here). To be eligible for these Guarantees, individual applicants can earn up to $125,000 and couples up to $200,000.
Find out more about the First Home Guarantee here and the Regional First Home Buyer Guarantee here (this information will be updated on 1 July to reflect the new eligibility criteria).
Changes to Family Home Guarantee
The third part of the Home Guarantee Scheme, the Family Home Guarantee, was introduced to support eligible single parents with at least one dependent to purchase a home sooner.
From July 1, this Guarantee will expand from single natural or adoptive parents with dependents to eligible borrowers who are single legal guardians of children such as aunts, uncles and grandparents. The Guarantee enables an eligible home buyer to purchase a home with as little as 2% deposit without paying Lenders Mortgage Insurance.
As with the First Home Guarantee and Regional First Home Buyer Guarantee, there are other important considerations, such as participating lenders, property price caps and a earning threshold for a single legal guardian of $125,000 per year.
Find out more about the Family Home Guarantee here (this information will be updated on 1 July to reflect the new eligibility criteria).
Who’s eligible?
Under the July 1 changes, all three Guarantees will also become available to eligible borrowers who are Australian Permanent Residents, in addition to Australian citizens.
To find out which Guarantee you can apply for, the National Housing Finance and Investment Corporation (NHFIC) has a short ‘eligibility checker’ questionnaire that you can access here.
How many are available?
In total, 35,000 places are available per year across the First Home Guarantee, and 10,000 places per year to 30 June 2025 under the Regional First Home Buyer Guarantee. For the Family Home Guarantee, 5,000 places are available per year to 30 June 2025.
To better understand how this expansion of the Home Guarantee Scheme can work in your favour, reach out to a broker today to book in a chat.
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