Up to 4,600 first-time homebuyer guarantees are now available

Do you want to buy your first home with just a 5% down payment and no lenders' mortgage insurance? You could be in luck since the federal government is planning to reissue up to 4,651 unused Home Guarantee Scheme places soon.

First-time homebuyers who utilize the Home Guarantee Scheme save 4 to 4.5 years on average on their house purchase since they don’t have to save the typical 20% deposit.

The government generally releases slots in the scheme once a year on July 1st, but this time it’s reissuing guarantees that had previously gone unclaimed.

What's the source of these additional spots?

From the 2020-21 fiscal year forward, the government said the plan will reissue “up to” 4,651 unused first-time buyer guarantees.

It goes on to say that many of the spots have been left unused due to COVID issues, but it’s unclear how many guarantees will be made available.

It’s also unclear when the spots will be reissued; the NHFIC, the government agency in charge of the scheme, says it’s working with panel lenders and “looks forward to reissuing unused guarantees shortly.”

Overall, this implies we’ll have very little warning when these positions become publicly available to apply for, and they may be in low supply.

If you’re interested in the guarantee, please contact us as soon as possible so that we can act quickly when the spaces become available.

What is the Home Guarantee Scheme, again?

So, the Home Guarantee Scheme is divided into three parts: two for first-time buyers and one for single parents known as the Family Home Guarantee Scheme.

At this time, it’s thought (but not confirmed) that the reissued spots will primarily be for first-time homebuyers under the New Home Guarantee Scheme (new builds) and the First Home Loan Deposit Scheme (includes existing builds).

These two schemes allow eligible first-time homebuyers to build or buy a home with just a 5% deposit and avoid paying lenders’ mortgage insurance (LMI).

This is because the federal government guarantees up to 15% of the value of the property purchased (to a participating lender).

Depending on the home price and deposit amount, not paying LMI can save purchasers anywhere from $4,000 to $35,000.

Eligible homes have price caps ranging from $950,000 for new builds in Sydney, Newcastle, Lake Macquarie, and Illawarra to $350,000 for existing properties in remote South Australia.

Here is a complete list of the price caps.

Get in touch with us right away to get things started.

Under these schemes, allocations are often made on a “first-come, first-served” basis.

It’s also worth noting that there will be a limited number of slots available at this time, and they will likely fill up quickly.

So, if you’re a first-time buyer looking to break into the market as soon as possible, get in touch with us today and we’ll go over the schemes with you in greater detail.

We can also assist you in applying for financing through a participating lender once the reissued spots become available.

To learn more, contact Premium Finance Group Australia at (07) 4720 8888 or email us at finance@pfga.com.au

Disclaimer: The content of this article is general and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your situation and may not be relevant to circumstances. Before taking any action, consider your particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced, or republished without prior written consent.

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