The Home Guarantee Scheme (HGS) is an Australian Government initiative to support eligible home buyers to purchase a home sooner. The Scheme is administered by Housing Australia on behalf of the Australian Government.
The HGS includes three types of Guarantees that your client may be eligible for:
The purpose of the First Home Guarantee (FHBG) is to support eligible home buyers to enter the housing market sooner. To be eligible, home buyers applying for the FHBG must have a minimum of 5% deposit, and can include first home buyers or previous home owners who haven’t owned a property in the ten years prior to the date they execute their home loan.
Prior property ownership includes a freehold interest in real property in Australia (this includes owning land only), an interest in a lease of land in Australia with a term of 50 years or more, or a company title interest in land in Australia.
Australian Citizens or Australian permanent residents may apply.
Individual or joint applicants may apply for the First Home Guarantee (FHBG). Joint applicants may include partners, friends, siblings, and other family members. All applicants must occupy the property as their principal place of residence and it must remain their principal place of residence whilst under the Scheme.
35,000 places have been made available.
The purpose of the Regional First Home Buyer Guarantee (RFBG) is to help eligible regional home buyers to buy a home sooner.
To be eligible, home buyers applying for the RFHBG must have a minimum of 5% deposit. They must have lived (or at least one applicant if applying as joint applicants) in the regional area or adjacent regional area they are purchasing in the for the preceding 12 month period to the date they execute the home loan agreement.
Australian citizens or Australian permanent residents may apply.
Employees required by their employer to relocate may be eligible for an exemption.
Individual or joint applicants may apply for the Regional First Home Buyer Guarantee. Joint applicants may include partners, friends, siblings, and other family members. All applicants must occupy the property as their principal place of residence and it must remain their principal place of residence whilst under the Scheme.
Home buyers not eligible for the RFHBG may be eligible for the FHBG or FHG.
The purpose of the FHG is to support eligible single parents and eligible single legal guardians to buy a home. An eligible single parent or eligible single legal guardian is not required to be a first home buyer, but must not own property at the time of entering into a loan under the FHG.
To be eligible, home buyers applying for the FHG must have a minimum deposit of 2% of the property value.
Australian citizens or Australian permanent residents may only apply.
Home buyers must be eligible single parents or eligible single legal guardians of at least one dependent.
5,000 places have been made available.
The New Home Guarantee (NHG) is no longer available. A NHG place reserved on, or before 30 June 2022, will still be able to progress to settlement, subject to meeting eligibility criteria and NHG requirements and timelines.
Your client’s reservation application for a HGS place will need to meet the eligibility criteria of nominated Guarantee they are applying for.
If your client is eligible and a place is available, they will be able to purchase a home and avoid paying any Lender’s Mortgage Insurance (LMI).
The minimum deposit required is set out in the eligibility criteria for each Guarantee under the Scheme.
If your client has more than the minimum amount required, it is a Scheme requirement that they contribute the maximum amount of their savings.
With a Guarantee under the Home Guarantee Scheme your client could purchase or build a home with a reduced deposit and avoid paying any Lenders Mortgage Insurance (LMI) in conjunction with their loan.
Normally if your client was purchasing or building a home today, they would need to provide a deposit of at least 20% of the property’s value to avoid paying Lender’s Mortgage Insurance (LMI).
With a guarantee provided under the Home Guarantee Scheme they can provide a deposit of as little as 2% or 5% (dependent upon the guarantee type) and the Guarantee will mean that they can avoid the expense of paying LMI.
It is important to check all aspects of your clients’ eligibility for the Home Guarantee Scheme and determine the correct Guarantee applicable for them, as part of your conversation.
Check your clients’ eligibility here.
| Individuals | $125,000 |
|---|---|
| Joint applicants combined income | $200,000 |
Important note: In addition to Home Guarantee Scheme eligibility criteria, home loans applications need to also comply with standard Auswide Bank lending policy and eligibility criteria.
Position your customer early so they are ready and clearly understand what they will need to provide to you so they have the best chance of being successful.
| Auswide Bank Broker Website: | www.auswidebrokers.com.au |
|---|---|
| Housing Australia Website: | www.housingaustralia.gov.au/support-buy-home |
| General Enquiries: | brokers@auswidebank.com.au |
| Any other enquiries: | Please contact your dedicated Broker Relationship Manager. Refer here for details. |
Auswide Bank Ltd ABN 40 087 652 060, Australian Credit Licence 239686 is the credit issuer. Approval is subject to meeting our credit assessment criteria. Terms, conditions, fees and charges apply. Prior to entering into a credit contract with us you should read our Credit Guide.
Auswide Bank is a panel lender for the Home Guarantee Scheme. Eligibility criteria applies. Once the Scheme places for non-major panel lenders has been utilised (or taken up) for each financial year, standard lending approval criteria, including the need for LMI where appropriate, will apply.
