Fast-Track Your First Home Purchase with the Home Guarantee Scheme
For many first-home buyers, saving a 20% deposit feels like an uphill battle, especially with the rising cost of living. In fact, CoreLogic reports that it now takes an average of 10.6 years to save for a deposit.
But there’s good news. The Home Guarantee Scheme (HGS) can help you get into your first home sooner, with as little as a 5% deposit and without paying Lenders Mortgage Insurance (LMI). Since its launch in 2020, over 193,000 first-home buyers have used the scheme to enter the market.
Let’s explore how it works and whether it could help you achieve homeownership sooner.
What Is the Home Guarantee Scheme?
Instead of providing a cash grant, like the First Home Owner Grant, the HGS allows the federal government to guarantee your home loan. This can benefit you in two key ways:
✅ Buy with just a 5% deposit – Many lenders require a 20% deposit to avoid LMI, but with the HGS, you only need 5%. ✅ Avoid costly Lenders Mortgage Insurance (LMI) – Normally, LMI adds thousands of dollars to your loan if your deposit is below 20%. Under the HGS, the government acts as a guarantor, eliminating the need for LMI.
This can significantly reduce upfront costs and help you enter the property market years earlier.
Three Home Guarantee Scheme Options
The HGS is available to three types of buyers:
1. First Home Guarantee 🏡
The First Home Guarantee helps eligible first-home buyers purchase a property with just a 5% deposit while avoiding LMI. In the 2024-25 financial year, 35,000 places are available.
2. Regional First Home Buyer Guarantee 🌿
If you’re buying in a regional area, the Regional First Home Buyer Guarantee could be the right fit. There are only 10,000 places available this financial year, so if you’re considering buying outside major cities, now is the time to act.
3. Family Home Guarantee 👨👩👦
Designed for single parents, the Family Home Guarantee allows eligible applicants—even if they’re not first-home buyers—to purchase a home with just a 2% deposit, without paying LMI. However, only 5,000 places are available for 2024-25.
Why More First-Home Buyers Are Using the HGS
Five years ago, only 1 in 10 first-home buyers used the HGS. Today, that figure is closer to 1 in 3. It’s not just about rising property prices—other factors make this scheme more appealing:
🔹 Expanded eligibility – The First Home Guarantee and Regional First Home Buyer Guarantee now include friends, siblings, and family members buying together. 🔹 Non-first-home buyers qualify – If you haven’t owned a property in the past 10 years, you may still be eligible. 🔹 A faster path to homeownership – Cutting years off your savings goal can help you enter the market before prices rise further.
Eligibility & Considerations
The 5% first-home buyer deposit scheme has some conditions:
- Income thresholds apply – You’ll need to meet income limits to qualify.
- Property price caps – The home you purchase must fall within the set price limits for your location.
- Limited lender participation – Not all banks and lenders offer HGS-backed loans.
Is the HGS Right for You? Let’s Talk!
If you’re looking to fast-track homeownership, the Home Guarantee Scheme could be the perfect solution.
At Clark Finance Group, we’ll help you: ✅ Check if you’re eligible for the HGS.
✅ Find lenders that offer 5% deposit home loans.
✅ Secure the best home loan for your needs.
📞 Book a free consultation today and let’s get you into your first home sooner!
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.
