Building a new home or buying a new house is an enormous task that can put a strain on your up-front finances. So to help people seeking to build a new home, the Australian government is offering financial schemes such as the 5% Deposit Scheme (formerly called the First Home Guarantee Scheme).
The scheme is an initiative by the Australian Government to help first home buyers purchase or build a new home. By providing a guarantee, it allows eligible first home buyers purchase a home with a deposit of as little as 5%.
Compared to the First Home Owners Grant, the difference is that you do not receive a cash benefit from the Government. Instead, you are guaranteed being able to purchase a home through a 5% deposit. So you can eliminate the hassle of trying to save a large sum for a deposit!
First home buyers on low to middle incomes are able to obtain a home loan with a deposit as low as 5%, with the remaining 15% value of the property guaranteed by the National Housing Finance and Investment Corporation. The Scheme can be applied to a variety of different residences.
The eligibility criteria has expanded to more people can benefit. A full list can be found on the scheme’s website, but key features include:
• Must be an Australian Citizen and at least 18 years of age. Unfortunately permanent residents do not qualify for this first home loan deposit scheme.
• A first home buyer who has not previously owned or had interest in a property in Australia either separately or jointly.
• Intend to be the owner occupier of the property.
• Couples are only eligible if they are married or in a de-facto relationship with each other.
• The Scheme is to assist singles and couples (together) who have at least 5% deposit saved. If you have 20% or more saved, then you will not be covered.
• There are no income caps.
The 5% Deposit Scheme (formerly the First Home Loan Deposit Scheme/First Home Guarantee Scheme) is an Australian Government initiative that helps eligible first home buyers purchase a home with as little as a 5% deposit.
The 5% Deposit Scheme allows buyers to purchase a home with a deposit as little as 5%, with the remaining amount (up to 15%), guaranteed by the Government. There is no Lenders Mortgage Insurance (LMI) either which is a great benefit to home buyers.
Eligible participants must be Australian citizens over the age of 18 and be an owner occupier. Eligibility criteria can change, so make sure you refer to the Government website to keep up to date.
If you believe you’re eligible for the Scheme, your mortgage broker can help determine your eligibility.
Want to find out if you’re eligible for the 5% Deposit Scheme? Send us a message and we’ll be in touch!
Over the last 50 years we have proudly built over 20,000 homes for Australian families. We have the same values today as we did in 1969 when we built our first home in Light Street Dianella.
