The federal government’s Home Guarantee Scheme (HGS) is helping an increasing number of Australians break into the market, research from Housing Australia has found.
According to the Federal Government, more than 32,500 guarantees were issued in the 2022–23 financial year, an increase of around 39% on 2021-22, when 23,300 guarantees were issued. That included:
- 10,860 guarantees for regional buyers – up 47% from the year before.
- 7,721 guarantees for key workers – up 37% from the year before.
The HGS includes three separate programs. The First Home Guarantee and Regional First Home Buyer Guarantee help first-time buyers purchase a property with just a 5% deposit, while the Family Home Guarantee helps single parents enter the market with a 2% deposit. Crucially, participants don’t have to pay lender’s mortgage insurance, because the government guarantees the difference between their deposit and a standard 20% deposit.
One standout feature of the HGS is how many young people are using government assistance to buy their first home. In 2022-23, 51% of First Home Buyer Grant participants were aged 18-29 years, while 60% of Regional First Home Buyer Grant participants were in that age bracket.
Another is the ultra-low arrears rate – for the two first home buyer programs, arrears were under 0.1% last financial year.
It’s also noteworthy that since the HGS started in 2019-20, a total of 9,730 participants – or 12% of the total – have transitioned out of the scheme by increasing their equity to at least 20%.
How to qualify for the HGS
Not all first home buyers and single parents are eligible for the HGS. Criteria apply.
That includes income caps: buyers can earn a maximum of $125,000 for singles and $200,000 for joint applicants.
It also includes property price caps, which differ from location to location, ranging from $400,000 for homes on Christmas Island and Cocos Islands to $900,000 for homes in Sydney, Newcastle, Lake Macquarie and Illawarra.
Also, not all lenders participate. There are 33 lenders that are able to offer HGS loans, including three of the big four banks and a range of smaller lenders.
Get in touch if you’re a first home buyer or single parent and you’re wondering if you’re eligible for the HGS. I’ll let you know if you qualify and work with you through the next steps to get you on the property ladder.
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