Understanding the First Home Buyer Guarantee Scheme

For many first-time buyers, purchasing a home can feel like an unattainable goal. High property prices and the challenge of saving for a deposit often make it difficult to step onto the property ladder. That’s where the First Home Buyer Guarantee Scheme (FHB Guarantee) comes in, a government initiative designed to help eligible buyers achieve their dream of homeownership sooner.

If you're considering buying your first home, here's everything you need to know about this scheme, including its benefits, eligibility requirements, and price caps.

What is the First Home Buyer Guarantee Scheme?

The First Home Buyer Guarantee is part of the Australian Government’s Home Guarantee Scheme. It allows eligible first-home buyers to purchase a home with a deposit as low as 5% without needing to pay Lenders Mortgage Insurance (LMI). The government guarantees up to 15% of the loan amount, reducing the risk for lenders and helping buyers save on additional costs.

This program is particularly beneficial for those who can afford mortgage repayments but struggle to save the traditional 20% deposit required to avoid LMI.

Who is Eligible for the First Home Buyer Guarantee?

To access the scheme, you’ll need to meet the following criteria:

1. First-Time Buyer Status
   You must not have previously owned or had an interest in a property in Australia, including commercial properties or land.

2. Income Limits

   • For singles, your taxable income must not exceed $125,000 in the previous financial year.

   • For couples, the combined income limit is $200,000.

3. Australian Citizenship
   At least one applicant must be an Australian citizen.

4. Owner-Occupancy
   The property you purchase must be your primary place of residence. This means you need to move in within six months of settlement and live there for as long as the loan is guaranteed.

5. Deposit Amount
   You need a minimum deposit of 5% of the property’s purchase price.

Property Price Caps for the FHB Guarantee

Property price caps vary depending on the location of the property and aim to reflect median housing prices in different areas. Here’s a breakdown of the maximum property price limits for some states and territories:

How the First Home Buyer Guarantee Can Benefit You

1. Lower Deposit Requirements
   Saving for a 20% deposit is a significant hurdle for many. With this scheme, you can get into your first home sooner with just a 5% deposit.

2. Avoid Lenders Mortgage Insurance
   LMI can add thousands of dollars to the cost of your loan. The government guarantee helps you sidestep this expense, saving you money upfront.

3. Access to More Affordable Housing Options
   By reducing the deposit barrier, you can explore property options that might otherwise have been out of reach.

How Rosh Partners Can Help

Navigating the complexities of the First Home Buyer Guarantee Scheme can be challenging. At Rosh Partners, we specialize in helping first-time buyers secure the right home loan. With over 20 years of experience, we’ll guide you through the application process, explain your options, and ensure you’re taking full advantage of government initiatives like the FHB Guarantee.

As a trusted mortgage broker in Melbourne, we’re here to help you make informed decisions and achieve your homeownership dreams with confidence.