The First Home Guarantee (FHBG) is part of the Home Guarantee Scheme (HGS), an Australian Government initiative to support eligible home buyers to buy a home sooner. It is administered by the National Housing Finance and Investment Corporation (NHFIC) on behalf of the Australian Government.
Under the FHBG, part of an eligible home buyer’s home loan from a Participating Lender is guaranteed by NHFIC. This enables an eligible home buyer to buy a home with as little as 5% deposit without paying Lenders Mortgage Insurance.
For the FHBG, any Guarantee of a home loan is for up to a maximum amount of 15% of the value of the property (as assessed by the Participating Lender). This Guarantee is not a cash payment or a deposit for a home loan. Eligibility criteria apply.
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To apply for the FHBG, home buyers must be:
- applying as an individual or 2 joint applicants
- an Australian citizen(s) or permanent resident(s) at the time they enter the loan
- at least 18 years of age
- earning up to $125,000 for individuals or $200,000 for joint applicants, 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 or previous homeowners who haven’t owned a property in Australia in the past ten years.
Access the Eligibility Tool – a short questionnaire to help home buyers determine which Guarantee/s they may be eligible for.
Contact a Participating Lender for more information, including the full list of eligibility criteria.
Home buyers applying for the FHBG need to have between 5% and 20% of the value of an eligible property saved as a deposit. The minimum deposit required for the FHBG is 5%, but Participating Lenders may require a higher percentage deposit based on individual financial circumstances.
Home buyers should speak with a Participating Lender to find out whether a deposit is made up of genuine savings for the purposes of their lending criteria and the FHBG.
Home buyers should confirm with their Participating Lender whether any cash grants received under other Australian Government, State or Territory schemes or programs can be considered as part of their genuine savings.
Contact a Participating Lender for more information and to discuss individual circumstances.
Property Types and Price Caps
Under the HGS, home buyers can buy a residential property, 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.
Use the Property Price Cap Tool to look up the property price caps for each location.
Specific timeframes and criteria apply to different property types. The contract of sale and (if applicable) eligible building contract may need to be executed by specific dates.
Contact a Participating Lender for more information, including the full list of property criteria.
How to Apply
HGS applications can only be made with a Participating Lender or their authorised representative (a mortgage broker). NHFIC does not accept HGS applications or provide personal financial advice.
Home buyers (and those advising them) should consider consulting a Participating Lender and seeking independent financial and legal advice about whether a particular home loan or property, and the terms of the HGS suit personal circumstances and objectives.
Before entering into a home loan agreement, home buyers should consider talking with their lender (or broker) about the potential implications of changing interest rates or house prices on individual circumstances.
Ask your Bank or Broker For More Information
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Eligible Home and Land Packages
The information provided in this article is for general informational purposes only and should not be considered as financial advice. The author(s) and the publisher of this article are not licensed financial advisors or registered investment advisors, and the content should not be interpreted as personalised financial advice.
The content of this article is based on the author(s)’ opinions and research at the time of writing and is subject to change without notice. It may not reflect the most current financial developments or investment strategies. You should not rely solely on the information provided in this article for making financial decisions.