First home buyer grants, concessions and benefits chop and change, but in recent years, they have mostly been aligned to the construction of new homes. By helping first home buyers (FHB) buy new properties, governments are also stimulating the building industry and incentivizing the supply of extra homes.
FHB grants have been around since 2000, when they were introduced to ease any slowing in home ownership caused by the GST. More recent benefits to come out of Covid and in response to low interest rates and rising house prices include the New Home Guarantee and First Home Loan Deposit Scheme, which allow 5% deposits instead of the usual 20%. And then there’s the Family Home Guarantee, which allows 2% deposits for single parents.
So what do they all mean and are you eligible?
New Home Guarantee
The New Home Guarantee is a federal initiative, recently extended for an additional 10,000 borrowers from 1 July 2021 to 30 June 2022.
Usually, FHBs need a 20% deposit or must pay lenders mortgage insurance (LMI).
This scheme allows a 5% deposit, while the remaining 15% (maximum) is guaranteed by the government. Note, it’s a ‘guarantee’, not a cash payment.
If you are covered by this Scheme, you can also access other government benefits for FHBs, that may be offered through states and territories.
Eligible New Home Guarantee properties include:
- newly-constructed dwellings
- off-the-plan dwellings
- house and land packages
- land and a separate contract to build a new home
For all types of eligible properties, a contract of sale and/or an eligible building contract must be entered into prior to the expiry of the 90 day pre-approval period.
First Home Loan Deposit Scheme
This scheme has also had 10,000 extra places added through to June 2022. The same 5% deposit is required as the New Home Guarantee, with a maximum of 15% of the property’s value guaranteed by the government. You can also still access state and territory FHB concessions.
The main difference is that existing properties are included in this scheme, not just new ones.
Eligible First Home Loan Scheme properties include:
- an existing house, townhouse or apartment
- a house and land package
- land and a separate contract to build a home
- an off-the-plan apartment or townhouse
Which scheme is for me?
To apply, you must be:
- an individual or couple (married / de facto)
- Australian citizen(s)
- at least 18 years of age
- earning up to $125,000 for individuals or $200,000 for couples
- intending to be owner-occupiers of the purchased property
- first home buyers who have not previously owned, or had an interest in a property in Australia
Family home guarantee (for single parents)
This scheme supports single parents with at least one child, by allowing a deposit as low as 2% to be used to buy a family home. The remaining 18% is guaranteed by the government and parents don’t have to be a first home buyer.
There are 10,000 guarantees available until 30 June, 2025 and applicants can also access other state and territory grants they may be eligible for.
You are eligible if you:
- are single (no spouse or de facto partner),
- have at least one dependent child (as defined by the Social Security Act 1991)
You must be able to show you are legally responsible for the day-to-day care, welfare and development of the dependent child and the dependent child is in your care.
Eligible Family Home Guarantee properties include:
- an existing house, townhouse or apartment
- a house and land package
- land and separate contract to build a home
- an off-the-plan apartment or townhouse
If you are purchasing an existing dwelling, the property must be purchased under a contract of sale dated on or after 1 July 2021.
Where do I apply?
All the above schemes are available through a number of participating lenders, a list of which can be found at: https://www.nhfic.gov.au/support-buy-home
All applications need to be made directly with a participating lender (or an authorised representative such as a mortgage broker). Speak to the Zinger Finance Mortgage Brokers to help you through the application process.
