Let’s Talk About the Expanded First Home Guarantee Eligibility

By Deltos Finance on May 22, 2024
first home guarantee eligibility

Have you heard of the First Home Guarantee scheme? Did you know its eligibility has expanded to include more aspiring homeowners who previously faced barriers to entry into the property market? Today, let’s talk about the expanded First Home Guarantee eligibility to help you know whether you can maximise this scheme. 

A Refresher: What Is the First Home Guarantee Scheme?

The First Home Guarantee is a government-backed scheme that makes it easier for first-time homebuyers in Australia to purchase their property. Eligible buyers can own a home with a 5% deposit without spending dollars upfront for Lenders’ Mortgage Insurance (LMI), which is often required for home loans with lower deposits. 

How does the First Home Guarantee work? The Australian government guarantees up to 15% of the property’s value to fill the gap between your 5% deposit and the standard 20%. So, if you’re buying a $500,000 townhouse, you would only need to pay a $25,000 deposit (5%) because the government would guarantee $75,000 (15%) of the loan amount. The best part is you won’t have to pay LMI costs.

Who’s Originally Eligible for the First Home Guarantee Scheme?

To be eligible for the scheme, home buyers must originally meet these criteria:

  • An Australian citizen of at least 18 years of age
  • Earns up to $125,000 
  • Intends to be owner-occupier of the purchased property
  • A first-home buyer of a property that falls within specified property type and price cap

Over the years, the eligibility requirements for the First Home Guarantee Scheme have expanded, helping more aspiring homeowners make their dreams a reality.

What Changed in the First Home Guarantee Scheme Eligibility? 

  1. Friends, Siblings, and Family Members Can Now Apply Together

One of the most significant changes is the ability for friends, siblings, and other family members to apply for the First Home Guarantee scheme jointly. This move recognises the changing dynamics of Australian households and the collaborative efforts often required to enter the property market. Imagine the possibilities! You and your best friend, or you and your sibling, can now pool your resources and support each other on the journey to homeownership. Just note that the taxable income required for joint applicants must be below the specified threshold of $200,000.  

  1. Non-First Home Buyers Can Also Benefit

The government has also extended the First Home Guarantee scheme’s eligibility criteria to include non-first home buyers who haven’t owned a property in Australia in the past decade. This change acknowledges the challenges faced by those who have fallen out of homeownership due to financial difficulties or relationship breakdowns, allowing them to re-enter the property market more easily. 

  1. Permanent Residents Can Now Access the Schemes

Another significant development is the inclusion of permanent residents in the eligibility criteria for the First Home Guarantee. If they are already a permanent resident when they enter the loan, they can be granted to own a home with only a 5% deposit. This move recognises the diverse makeup of Australian society and ensures permanent residents have equal opportunities to achieve homeownership.

Expanded First Home Guarantee Eligibility

How the Expanded Eligibility Helps First-Home Buyers with Low Incomes

The expanded eligibility criteria for the First Home Guarantee scheme offer several potential benefits for first-home buyers with low incomes:

  • Increased Housing Affordability: Now that friends, siblings, and other family members can jointly apply for the scheme, individuals with lower incomes no longer have to wait too long to save for a deposit. They can pool their resources together and increase their overall borrowing capacity. 
  • Residency Status Is No Longer an Issue: The inclusion of permanent residents in the eligibility criteria opens up the scheme to a broader segment of the population, including those with lower incomes who may have previously been excluded due to their residency status.
  • Assistance for Those with Low Incomes Wanting to Own a Home Again: Buying a new home with a low income, especially after dealing with financial issues and other life situations that have caused you to lose your first home in the first place, can be tough. But with the expanded eligibility, people with low incomes, given they haven’t owned a home in the past ten years, can have another chance to become homeowners and feel secure in their place. 
  • Potential for Increased Market Activity: With more people now eligible for the scheme, there may be an increase in demand for properties in Australia. That can potentially stimulate market activity and provide more opportunities for first-home buyers with lower incomes to find suitable properties.

A Chance to Secure Your Future

With these expanded eligibility criteria, the First Home Guarantee scheme has become more inclusive and accessible. Whether you’re a first-time home buyer, a non-first home buyer who has been out of the market for a while, or a permanent resident, this is your chance to secure a place to call your own.

However, it’s important to note that the number of guarantees available is limited, and the demand is expected to be high. So, if you’re interested, it’s critical to act promptly. Get in touch with one of our experienced mortgage brokers in Hobart. 

Together, we can navigate the application process, explore your options & ensure you’re well-prepared to take advantage of this incredible opportunity. Don’t let this chance slip away—the path to homeownership

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