Australia’s First Home Buyer Guarantee Scheme

The dream of owning a home is a universal aspiration and most often than not, first home buyers will be looking at a home loan. 

In Australia, the First Home Guarantee Scheme (FHBG), which is part of the Home Guarantee Scheme (HGS) was launched in 2019 with an aim to assist first time home buyers not only in Perth but throughout Australia in entering the property market. 

In a historic move, the Australian government has extended the First Home Guarantee Scheme to permanent residents. This is the first time that the scheme has been made available to permanent residents and is a major step towards making home ownership more attainable for all Australians.

If you are looking for a home loan in Perth, this article will provide a comprehensive understanding of the First Home Guarantee Scheme, its recent expansion to include permanent residents, and how you can apply for it.

Understanding the First Home Guarantee Scheme

The First Home Guarantee Scheme is a government initiative designed to assist first time home buyers in entering the property market. Its primary objectives include reducing the barriers to homeownership, promoting housing affordability, and stimulating economic growth. 

Usually without 20% of deposit Lenders Mortgage Insurance (LMI) would be required to be taken out. However, with this scheme, first time home buyers are able to purchase a property with a deposit as low as 5%, with LMI waived. As such, with the scheme, the government will guarantee up to 15% of the home loan. This means that the lender is only exposed to 80% of the loan amount, which makes it easier for first home buyers to get approved for a loan.

For years, this scheme has empowered countless Australians to achieve their dream of owning a home.

With the recent extension of the scheme, permanent residents who were previously excluded from this opportunity can now also avail its benefits, making the scheme more diverse and inclusive than ever before.

With the new inclusion, the First Home Guarantee scheme is now available to first home buyers who met certain eligibility criteria:

• Being an Australian citizen or permanent resident
• Having a combined income of less than AUD125,000 (or AUD200,000 for couples)
• Not having owned a property in the past five years
• Making a deposit of at least 5% of the purchase price
• At least 18 years of age
• The residential property’s value is within the price limits established by the government in your state or local region