Regional Home Guarantee | Buy In Regional Areas With A 5% Deposit

During the 2022 federal budget announcement, the government revealed it will expand its existing home buyer schemes and will introduce a new scheme for regional home buyers later this year.

What Is The Regional Home Guarantee?

It is an expansion of the existing First Home Guarantee (formerly known as the First Home Loan Deposit Scheme). If you have a deposit as small as 5% of the property value, you can buy or build a property in a regional area without paying Lenders Mortgage Insurance (LMI)

The new Regional Home Guarantee will provide up to 10,000 places each year from 1 October 2022.

LMI is usually applicable when you’re borrowing more than 80% of the property value. Under the Regional Home Guarantee Scheme, however, you can borrow up to 95% of the property value without paying LMI. The government will guarantee 15% of the value of your loan.

When Will It Be Available?

If the legislation passes, the scheme will be available from 1 October 2022 to 30 June 2025.

What Are The Eligibility Requirements?

  • You must be a first-home buyer or someone who has not owned property in the last five years.
  • Permanent residents are eligible.
  • You must buy or build a new home in selected regional areas.

Price caps for the scheme have not yet been announced.

Call us on 1300 889 743 or complete our free assessment form to find out if you’re eligible.

What Other Schemes Are Available?

Visual representation of help to buy scheme with a real-life scenario

Besides the Regional Home Guarantee, there are two other schemes under the Home Guarantee Scheme:

  • First Home Guarantee (formerly known as the First Home Loan Deposit Scheme): For first-home buyers with a deposit of 5%.
  • Family Home Guarantee: Single parents with dependants can buy or build a new home with a deposit of just 2% of the property value.

The New Home Guarantee is an extension of the First Home Guarantee for first-home buyers buying a new home. This scheme will end on 30 June 2022.

We also have options available if you don’t qualify for a scheme:

Discuss your situation with us and we’ll find you a home loan. Call us on 1300 889 743 or enquire online today!

Alan Hemmings, CEO of Home Loan Experts, expressed approval of the changes.

“The expansion of the First Home Buyer Guarantee and Family Guarantee Scheme are welcome, certainly with the First Home Buyer Guarantee scheme we have seen places fill very quickly so expanding the number of opportunities for first home buyers is a great outcome,” Hemmings said.

“The addition of the Regional Home Guarantee is also welcome,” he continued. “This will help first-home buyers and buyers who have been out of the market for more than five years get into their own home.

“One thing for the government to consider with the expansion of these schemes is expanding the number of lenders who are participating as well. Given the increased number of places, expanding the range of lenders available will help maintain service levels and provide a great customer-service outcome for brokers and lenders alike.

Labor’s Regional First Home Buyer Support Scheme

Labor has also promised a scheme for regional home buyers should it win the federal election. Under the proposed Regional First Home Buyer Support Scheme, there will be 10,000 places each year for families in regional areas.

Eligible buyers can qualify with a deposit as low as 5% of the property value, without paying LMI.

The scheme would be reserved for residents who have lived in their region for more than 12 months and are buying a home in which they will live.

Price caps vary by location:

Region Price Cap
Illawarra, Central Coast and Newcastle (NSW) $800,000
NSW (Other) $600,000
Geelong, Victoria $700,000
Victoria (Other) $500,000
Gold Coast, Sunshine Coast (Queensland) $600,000
Queensland (Other) $450,000
Western Australia $400,000
Tasmania $400,000
South Australia $350,000
Northern Territory $500,000

These price caps will be reviewed and updated every six months and unused guarantees will be re-allocated.

Coalition’s 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 Regional Home Guarantee

Our mortgage brokers can help you lodge your application for a place in any scheme. Call us on 1300 889 743 or enquire online today!

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