What Is The Home Guarantee Scheme?
The government introduced the Home Guarantee Scheme to help borrowers with a deposit of at least 5% qualify for a home loan without paying Lenders Mortgage Insurance (LMI).
Typically, to avoid paying LMI, you need a 20% deposit. However, under the scheme, eligible borrowers can avoid LMI even with a deposit as small as 2%, since the government will guarantee up to 18% of the value of the property.
There are three different plans in the Home Guarantee Scheme:
First Home Guarantee
Previously known as First Home Loan Deposit Scheme
Family Home Guarantee
Buy a house with 2% deposit
Regional Home Guarantee
Buy a house in regional area with 5% deposit
Here is a summary of the three plans.
| Details | First Home Guarantee | Family Home Guarantee | Regional Home Guarantee |
|---|---|---|---|
| What is the minimum deposit? | 5% | 2% | 5% |
| What type of property is accepted? | Purchase a new or an existing home | Build a new home or purchase an existing home | Purchase or build a new home |
| How many places are available? (from1 July 2022) | 35,000 each year | 5,000 each year | 10,000 each year (from 1 October 2022) |
| Who can apply? | Single people or couples | Single parent with at least one child dependant | Single people or couples |
| Is it only for first home buyers? | Only for first home buyers | First home buyers or previous homeowners who do not currently own a home | First home buyers or anyone who has not owned a home in the last five years. |
| Are there location restrictions? | Capital cities, regional centres and rest of state | Capital cities, regional centres and rest of state | Certain regional locations only |
Is the New Home Guarantee part of the Home Guarantee Scheme?
No, the New Home Guarantee is not included in the Home Guarantee Scheme.
The New Home Guarantee was an extension of the First Home Guarantee that was introduced during the pandemic. Under this scheme, first home buyers could only build or purchase new homes.
The New Home Guarantee will end on 30 June 2022.
What Are The Benefits of the Home Guarantee Scheme?
- You don’t have to wait and save for a large deposit.
- The three different plans cater to borrowers with different property ownership histories.
- First home buyers can use the scheme with other grants and concessions
- You can potentially save over $30,000 in LMI fees
How much do I save in LMI?
| Value of the property | How much are you borrowing | LVR | LMI saved |
|---|---|---|---|
| $950,000 | $902,500 | 95% | $39,273 |
| $850,000 | $807,500 | 95% | $35,139 |
| $750,000 | $712,500 | 95% | $31,005 |
| $650,000 | $617,500 | 95% | $26,871 |
| $550,000 | $522,500 | 95% | $22,737 |
The figures in this table are estimates. You can use our LMI calculator to find out how much you save in different states and territories.
What Are The Price Caps For The Home Guarantee Scheme?
Price caps are available for the First Home Guarantee and Family Home Guarantee.
| Region | 2020-21 First Home Guarantee | 2021-22 First Home Guarantee and Family Home Guarantee | 2022-23 Price Caps* |
|---|---|---|---|
| NSW – Sydney & regional centres (Newcastle, Lake Macquarie & Illawarra) |
$700,000 | $800,000 | $900,000 |
| NSW – rest of state | $450,000 | $600,000 | $750,000 |
| VIC – Melbourne & regional centre (Geelong) |
$600,000 | $700,000 | $800,000 |
| VIC – rest of state | $375,000 | $500,000 | $650,000 |
| QLD – Brisbane & regional centres (Gold Coast & Sunshine Coast) |
$475,000 | $600,000 | $700,000 |
| QLD – rest of state | $400,000 | $450,000 | $550,000 |
| WA – Perth | $400,000 | $500,000 | $600,000 |
| WA – rest of state | $300,000 | $400,000 | $450,000 |
| SA – Adelaide | $400,000 | $500,000 | $600,000 |
| SA – rest of state | $250,000 | $350,000 | $450,000 |
| TAS – Hobart | $400,000 | $500,000 | $600,000 |
| TAS – rest of state | $300,000 | $400,000 | $450,000 |
| ACT | $500,000 | $500,000 | $750,000 |
| Northern Territory | $375,000 | $500,000 | $600,000 |
| Jervis Bay Territory & NorfolkIsland | $450,000 | $550,000 | $550,000 |
| Christmas Island and Cocos (Keeling) Islands | $300,000 | $400,000 | $400,000 |
*The 2022-23 price caps are applicable for the First Home Guarantee and Family Home Guarantee from July 2022.
The price caps for the Regional Home Guarantee are yet to be released.
What Is The First Home Guarantee (First Home Loan Deposit Scheme)?
The First Home Guarantee (formerly known as the First Home Loan Deposit Scheme), helps first home buyers with a deposit as low as 5% buy a home without paying Lenders Mortgage Insurance (LMI).
| First Home Guarantee | Details |
|---|---|
| When was it introduced? | It was first introduced on 1 January 2020 as the First Home Loan Deposit Scheme, but now it’s known as First Home Guarantee. |
| Who can apply? | Australian citizens who are first home buyers |
| What is the income cap? | Single applicants with an annual taxable income of less than $125,000 or less than $200,000 for couples |
| How many places are available? | 35,000 places each year from 1 July 2022 to 30 June 2025. |
For more information on the First Home Guarantee (previously known as the First Home Loan Deposit Scheme), go here.
What Is The Family Home Guarantee?
The Family Home Guarantee helps single parents with children as dependants buy an existing home or build a new one with a deposit as low as 2%.
| Family Home Guarantee | Details |
|---|---|
| When was it introduced? | It was introduced on 1 July 2021. |
| Who can apply? | Australian citizens who are either first home buyers or previous homeowners who do not currently own a home |
| What is the income cap? | Annual taxable income must not exceed $125,000 |
| How many places are available? | Originally offered 10,000 places spread over four years, from July 2021. Now, beginning in July 2022, 5,000 additional places will be available each year, from y 2022 through 30 June 2025. |
For more details, about the Family Home Guarantee, go here.
What Is The Regional Home Guarantee?
The Regional Home Guarantee allows you to buy or build a new home in a regional area with at least a 5% deposit.
| Regional Home Guarantee | Details |
|---|---|
| When was it introduced? | It was introduced as part of the 2022-23 budget. It will come into effect on 1 October 2022, if Parliament passes the legislation, as expected. |
| Who can apply? | Australian citizens or permanent residents who have not owned property in the last five years. |
| What is the income cap? | To be announced |
| How many places are available? | 10,000 places each year from 1 October 2022 to 30 June 2025. |
For more details about the Regional Home Guarantee, go here.
Super Home Buyer Scheme
The Coalition proposed the Super Home Buyer Scheme ahead of the federal election in May 2022. It is designed to help first-home buyers purchase a home sooner by using part of their super as a deposit. The plan will go into effect only if the Coalition wins re-election. You can get all the details of the scheme here.
How To Apply For The Home Guarantee Scheme
You will need to send your application to a participating lender. We can help you with your application. Call us on 1300 889 743 or enquire online today.
