Buying your first home can be an exciting yet daunting experience, especially when it comes to financing. Fortunately, the Australian government has introduced several initiatives to help eligible first-home buyers enter the property market sooner. In this article, we will guide you through the First Home Guarantee (FHBG), a government initiative that provides assistance to eligible first-home buyers.
What is the First Home Guarantee?
The FHBG is an initiative by the Australian government to help eligible first-home buyers purchase a home sooner. Administered by the National Housing Finance and Investment Corporation (NHFIC), this scheme allows eligible buyers to purchase a property with as little as a 5% deposit without the need to pay Lenders Mortgage Insurance (LMI).
Under the FHBG, part of an eligible first home buyer’s home loan from a Participating Lender is guaranteed by NHFIC. This provides an opportunity for first-home buyers to enter the market without requiring a large deposit or significant LMI costs.
Who is eligible for the First Home Guarantee?
To apply for the FHBG, home buyers must meet the following eligibility criteria:
- Applying as an individual or couple (married / de facto) (see amendment starting 01 July 2023)
- Australian citizens at the time of entering the loan
- At least 18 years of age
- Earning up to $125,000 for individuals or $200,000 for couples, as shown on the Notice of Assessment issued by the Australian Taxation Office
- 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 (see amendment starting 01 July 2023)
How to apply for the First Home Guarantee?
Applications for the FHBG can only be made through a Participating Lender or authorised representative such as a mortgage broker. NHFIC does not accept applications or provide personal financial advice.
Home buyers should consider consulting with their mortgage brokers and seeking independent financial and legal advice to determine whether a particular home loan or property and the terms of the FHBG suit their personal circumstances and objectives.
What types of properties can you buy under the First Home Guarantee?
You can purchase a range of residential properties under the FHBG, including:
- 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
The property must also be within the price caps for each location, which vary depending on where you want to buy. You can use the Property Price Cap Tool on NHFIC’s website to look up the price caps for each location.
Changes in the First Home Guarantee beginning 01 July 2023
- Starting July 1, 2023, joint applications under the First Home Guarantee will be allowed for friends, siblings, and other family members.
- The updated scheme will also be available to eligible Australian residents who have previously owned a property in Australia but is limited to those who haven’t owned it in the last 10 years.
Other Schemes & Grants Available
The FHBG is one of several government initiatives that support first-home buyers in Australia. You may also be eligible for other schemes such as:
- The Regional First Home Buyer Guarantee (RFHBG), supports eligible regional first home buyers to buy a home in a regional area with a 5% deposit.
- The Family Home Guarantee (FHG), supports eligible single parents with at least one dependent child to buy a home with a 2% deposit.
- The First Home Owner Grant (FHOG), provides a one-off payment to eligible first-home buyers who buy or build a new home.
- The First Home Super Saver Scheme (FHSSS), allows you to save money for your first home inside your superannuation fund.
We’re here to help!
Navigating the property market as a first-home buyer can be challenging. At Maverick Finance, our team of experienced mortgage brokers can help you explore your options and guide you through the process of applying for the FHBG and other schemes. Speak to us today!
Maria Papa is a senior property and finance expert specializing in home loans, investment loans, self-employed loans, alt doc loans, car loans, personal loans, and loan protection. She has offices in Sydney, Melbourne, and Manila. If you have questions, you can call Maria at 0430 144 008 or email her at mpapa@maverickfinance.com.au
Your full financial situation will need to be reviewed prior to acceptance of any offer or product.