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As of today 50,000 new places are available to home buyers looking to access a mortgage with a smaller deposit under the three Home Guarantee Schemes.
The federal government’s Home Guarantee Scheme – which encompasses the First Home Guarantee, the Regional First Home Buyer Guarantee, and the Family Home Guarantee and is very popular with broker clients – has opened up for submissions for the financial year 2025 places.
The government scheme is administered by Housing Australia and enables home buyers to access the property market sooner by accessing a mortgage with a low deposit without having to pay lenders mortgage insurance (LMI).
Instead, eligible home buyers can apply for a loan through one of the 32 participating lenders on the panel, with as little as 5 per cent deposit for the First Home Guarantee or the Regional First Home Buyer Guarantee and 2 per cent under the Family Home Guarantee.
The federal government ‘guarantees’ the rest.
From today (1 July) there are:
- 35,000 places for the First Home Guarantee (FHBG).
- 10,000 places for the Regional First Home Buyer Guarantee (RFHBG) until 30 June 2025.
- 5,000 places for the Family Home Guarantee (FHG) until 30 June 2025.
Speaking of the new places, Housing Australia CEO Nathan Dal Bon said: “Housing Australia is delighted to offer 50,000 new places in a key Government housing program that provides more Australians and permanent residents with greater access to the property market, enabling them to bring forward plans to buy their own home.”
Housing Australia chief program officer HGS Jennifer Chew said: “We look forward to continuing to work with our participating lenders and their broker networks to help more aspiring home owners get their foot on the property ladder and experience the safety and security of home ownership.”
Since inception in January 2020, more than 160,000 Australians have already bought or built their own home with support from the scheme.
The Home Guarantee Scheme’s share of the first home buyer market grew significantly in the past few years, with almost one in three first home buyers in 2022–23 supported by the scheme, up from one in seven in 2021–22.
The criteria were expanded last year to enable more borrowers to access the guarantees. This included allowing friends, siblings, and other family members to apply, opening up the First Home Guarantee to non‑first home buyers who have not owned a property in Australia within the previous 10 years and enabling legal guardians to access the Family Home Guarantee.
However, the scheme has not been without its hiccups. Servicing issues curtailed some of the uptake of the schemes last year following a rapid run of rate hikes and just last week in the final days of the FY24 scheme, National Australia Bank (NAB) reported “issues” when lodging new submissions for the Home Guarantee Scheme.
The bank said it had identified the issue and fixed it on Thursday (27 June), extending the cut-off time to 2pm Friday to enable brokers to lodge their final deals for the year. IT has since apologised to brokers for the inconvenience.
[Related: NAB apologises for Home Guarantee issue]
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