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Home Guarantee Scheme Explained

As a rebrand of the previous First Home Loan Deposit Scheme, July marks the start of the new Home Guarantee Scheme - with more than triple the availability. 


Although the Liberal Government’s previous First Home Loan Deposit Scheme (FHLDS) has now been retired, July 1 2022 marks the dawn of a new era for first home buyers thanks to the launch of the Home Guarantee Scheme. 

While first home buyers have quite a few options to choose from when it comes to federal property initiatives, the success of the initial scheme is often credited for its ability to cut down on the time required to save up for a home loan deposit. 

It would seem that the new Labor government has been paying attention to this, and have chosen to retain many of the core principles of the previous FHLDS, while still making improvements on its accessibility – so what’s new with the Home Guarantee Scheme?

How The Home Guarantee Scheme Works 

Traditionally, first home buyers are usually required to spend years saving up for the all important 20% deposit, or otherwise pay Lenders Mortgage Insurance. Given that the median price of residential dwellings in Australia rose $16,600 over the last financial quarter alone to an eye watering $941,900, these astonishing figures translate into saving for a deposit that equates to roughly $190,000. Without help, this could easily take decades. 

As an alternative, the Home Guarantee Scheme provides a way for first home buyers to enter the market with as little as 5% deposit. Much like a traditional guarantor loan, the Home Guarantee Scheme works by having the government act as your financial backer, or “guaranteeing” the remaining 15% deposit until the buyer has repaid it to the bank.

For first home buyers eager to capitalise on the opportunity to break into the property market faster, the good news is that applications for the Home Guarantee Scheme are now open. What’s more, is that the initiative is now open to a whopping 35,000 applicants per year – up from the previous cap of 10,000. 

In addition, Labor has also opted to continue with the Family Home Guarantee. As a low-deposit purchase scheme targeted at single parents with up to 5,000 places per year, the scheme will double its capacity, up from the previous cap of 2,500 places per year. The Family Home Guarantee will be available for eligible single parents with at least one dependent child each financial year until 30 June 2025, so single mums and dads have time to get organised without fear of only having twelve months to access the scheme. 

Separately, a new Regional First Home Buyer Support Scheme has also been allocated 10,000 places. In addition, Labor has also pledged to improve the operation of the current scheme by reviewing and updating the price caps on a six-monthly basis, and improving the process of reallocating unused guarantees. 

Although similar in nature to the Home Guarantee Scheme, the Regional First Home Buyer Support Scheme covers more areas than many applicants originally think, such as regional Victorian hubs like Geelong. While there are separate property and income price caps to the Home Guarantee Scheme, the great thing about all three initiatives is that they include existing dwellings as well as newly constructed homes. 

For first home buyers looking to take advantage of such initiatives, it’s important to note that not all Australian lending providers are participating in the Home Guarantee Scheme. In addition,  the ones that are still have wildly different loan options in terms of features, fees and interest rates – so the services of a reputable mortgage broker have arguably never been more helpful to determine the right fit for you. 

Your Guide For Navigating The World Of Home Loans 

With a background in banking, finance, business development and project management, there’s no better advocate to have on your team than Nikki Berzin. As a fully qualified mortgage broker and director of Cherry Lending & Finance, Nikki is passionate about all things finance, and empowering her clients with the tools to hit their property goals is what she does best.

If you’re looking to get into your first home, purchase an investment property or even want to look at your options for refinancing, the first step is starting the conversation. Get in touch with Nikki today, or call her directly on 0427 374 155 to bring your mortgage dreams to life.

Disclaimer: Your full financial needs and requirements need to be assessed prior to any offer or acceptance of a loan product.  Subject to lenders terms and conditions, fees and charges and eligibility apply.

Credit Representative 499652 is authorised under Australian Credit Licence 389328.