Federal Government Homebuyer Grants and Schemes
The housing crisis is biting deep across Australia. Property prices continue to increase, and rentals are less affordable (and harder to find) than ever before.
This impacts homebuyers and renters directly. But it’s also biting hard at politicians of all stripes as the nation tries to catch up on the poor planning of previous state and federal governments.
Supply of housing (or, rather, the lack of it) is seen as the main problem. So while governments are trying to address this long-term issue with short-term initiatives, they’ve also been adding more support on the demand side, with financial grants and schemes aimed primarily at first homebuyers and those looking to live in the regions.
We’ve already outlined the Victorian government’s first homebuyer grants and initiatives to assist people to purchase a place to live. Make sure to check this out too. Here’s a round-up of the often-confusing national initiatives, as of August 2024.
Home Guarantee Scheme
If you buy a property with less than a 20% deposit, your bank or lender might charge you Lenders Mortgage Insurance (LMI). This protects the lender if you’re unable to make repayments. Note that you’re being charged to protect the bank, not yourself.
The Home Guarantee Scheme offers some buyers the chance to avoid paying LMI, even if they have far less than the usual 20% deposit. It’s divided into three sections:
1. First Home Guarantee
This allows eligible buyers to get a home loan with a deposit as low as 5%. The government guarantees the rest of the deposit. You’ll still need a bit of extra cash to cover legal costs, loan setup fees and the like.
To qualify
There are several criteria. Among them, you must be:
- Australian citizens or permanent residents
- First-home buyers earning up to $125,000 a year (singles) or $200,000 a year (couples)
- Planning to live in the property
2. Regional First Home Buyer Guarantee
Similar to the First Home Guarantee, this applies to people wanting to buy in a regional area.
To qualify
In addition to the First Home Guarantee criteria, you must:
- Buy outside capital cities
- Have been living in or near the region for 12 months.
3. Family Home Guarantee
This helps single parents or guardians with at least one dependent child purchase a home with just a 2% deposit (or more). The scheme is very limited: there are only 5000 guarantees available in the 2024–25 financial year.
To qualify
Similar criteria apply to the other Home Guarantee Scheme offers, including income tests. In addition:
- Must be a single parent/guardian
- It’s ok if you have owned property before.
Get Expert Advice
Contact us at Mortgage Broker Melbourne for a free appraisal of which guarantee scheme you might qualify for.
First Home Super Saver Scheme
Using superannuation for anything other than retirement is always controversial. But that’s exactly what the catchily-named FHSSS offers. Since super was introduced in 1992, Australians have been able to make additional contributions and receive tax benefits.
With the First Home Saver Super Scheme, any additional super contributions can be used by some first homebuyers to secure a deposit for a property.
Depending on how much has been added to someone’s super over the years, first homebuyers can access up to $50,000 ($100,000 for couples) to contribute to a deposit.
To qualify
- Once more, there are several criteria you need to meet to qualify. If you’ve been making extra contributions to your superannuation (e.g. through salary sacrifice), it’s worth looking into.
Help To Buy
Similar to the Family Home Guarantee, the federal government Help To Buy scheme means you can co-own your property with the government with as little as 2% deposit.
Known as ‘shared equity’ the government provides the bulk of the deposit and also makes contributions to the mortgage. They fund and own up to 45% of your property.
Over the years, it’s possible to increase your share of ownership. If you sell the property before your home loan is paid off, the government will keep their share of the value.
To qualify
- There’s lots of fine print involved in this scheme, which is limited to just 10,000 applicants per year.
Talk to us
Help to buy a property is great. But it can also be complicated. If you want to know more about these government schemes, and find out whether you qualify for one or more of these programs, drop us a line.
Our advice to you is 100% free. When you’re in a position to get a home loan, we can you find the best deal for your circumstances and even help with the paperwork. Let’s get you into your dream first home sooner. Talk to our team our expert mortgage brokers today.
Contact Mortgage Broker Melbourne.
Marc has been a professional lender for 28 years. After beginning his career in 1990 with a UK Building Society, he moved to Australia where he held several different retail banking roles. In 1999 it became clear to him that a mortgage broker would eventually become an obvious choice for someone looking for a home loan so he took the plunge and became an independent broker. He hasn’t looked back since!