What Is The Home Guarantee Scheme?
The government introduced the Home Guarantee Scheme to help borrowers with a deposit of at least 2% 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 First Home Buyer Guarantee
Buy a house in regional area with 5% deposit
Home Guarantee Scheme Expands Eligibility For 2023-24
The federal government has announced changes to the Home Guarantee Scheme. The changes will greatly expand the number of people eligible to participate in the scheme. From 1 July 2023:
- Friends, siblings and other groups of family members can jointly apply for the First Home Guarantee and Regional First Home Buyer Guarantee.
- Non-first-home buyers who have not owned property during the last 10 years can also apply.
- Borrowers who are single legal guardians of children – such as their aunts, uncles and grandparents – can apply for the Family Home Guarantee.
- Australian permanent residents are eligible to apply for all three schemes: First Home Guarantee, Regional First Home Guarantee and Family Home Guarantee.
With the expansion of the eligibility criteria, owning a home could be within reach for many more buyers. To find out if you can apply, call us on 1300 889 743 or complete our free assessment form today.
Here is a summary of the three plans.
| Details | First Home Guarantee | Family Home Guarantee | Regional First Home Buyer Guarantee |
|---|---|---|---|
| What is the minimum deposit? | 5% | 2% | 5% |
| What type of property is accepted? | A new or existing home | A new or existing home | A new or existing home |
| How many places are available? (from 1 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? | Yes | First-home buyers or previous homeowners who do not currently own a home | Yes |
| Are there location restrictions? | No | No | Yes, you can buy only in regional areas |
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 ended 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 $39,000 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 For First Home Guarantee And Family Home Guarantee
| Region | 2022-23 Price Caps* |
|---|---|
| NSW – Sydney & regional centres (Newcastle, Lake Macquarie & Illawarra) |
$900,000 |
| NSW – rest of state | $750,000 |
| VIC – Melbourne & regional centre (Geelong) |
$800,000 |
| VIC – rest of state | $650,000 |
| QLD – Brisbane & regional centres (Gold Coast & Sunshine Coast) |
$700,000 |
| QLD – rest of state | $550,000 |
| WA – Perth | $600,000 |
| WA – rest of state | $450,000 |
| SA – Adelaide | $600,000 |
| SA – rest of state | $450,000 |
| TAS – Hobart | $600,000 |
| TAS – rest of state | $450,000 |
| ACT | $750,000 |
| Northern Territory | $600,000 |
| Jervis Bay Territory & NorfolkIsland | $550,000 |
| Christmas Island and Cocos (Keeling) Islands | $400,000 |
*The 2022-23 price caps are applicable for the First Home Guarantee and Family Home Guarantee from July 2022.
Price Caps For Regional First Home Buyer Guarantee
| State | Regional Centre* | All Other Regional Areas |
|---|---|---|
| New South Wales | $900,000 | $750,000 |
| Victoria | $800,000 | $650,000 |
| Queensland | $700,000 | $550,000 |
| Western Australia | – | $450,000 |
| South Australia | – | $450,000 |
| Tasmania | – | $450,000 |
*Regional centres are Newcastle and Lake Macquarie, Illawarra, Geelong, Gold Coast and Sunshine Coast.
| Territory | All Areas |
|---|---|
| NT Regional | $600,000 |
| Jervis Bay Territory & Norfolk Island | $550,000 |
| Christmas Island & Cocos (Keeling) Islands | $400,000 |
| ACT | Not applicable |
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 is now 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? | 1 July 2021. |
| Who can apply? | Australian citizens who are single parents and 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 1 July 2022 through 30 June 2025. |
For more details, about the Family Home Guarantee, go here.
What Is The Regional First Home Buyer Guarantee?
The Regional First Home Buyer 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 during the 2022 federal elections |
| 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 couples with less than $200,000 |
| 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.
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.
