In good news for many first home buyers, regional buyers and single parents, another five lenders will offer the Home Guarantee Scheme to their customers.
Starting from 1 July 2022, Credit Union SA, Illawarra Credit Union, IMB Bank, Newcastle Permanent Building Society and Unity Bank will participate in the federal government program. They will join an existing panel of 27 lenders, which includes Commonwealth Bank, NAB, Bendigo Bank, Teachers Mutual Bank and Bank Australia.
The Home Guarantee Scheme helps first home buyers, regional buyers and single parents. Eligibility criteria apply, including income caps of $125,000 for individuals and $200,000 for couples. Also, borrowers must pass the lender’s usual credit assessment.
First home buyers
The government plans to support 35,000 eligible first home buyers in the 2022-23 financial year.
Eligible first home buyers will be able to get a mortgage with just a 5% deposit, without needing to pay lenders mortgage insurance (LMI). Normally, lenders charge LMI when a borrower has less than a 20% deposit, but the federal government will guarantee 15% of the first home buyer’s loan, taking them up to the 20% threshold.
Property price caps will apply (which differ from region to region).
Regional buyers
The government also plans to support 10,000 regional Australians (starting from 1 October), who, again, will need only a 5% deposit to enter the market.
To be eligible, you must be either a first home buyer or have not owned a property for at least five years. Also, you must live in a regional location and buy in that region.
Single parents
The government will also support 5,000 single parents in the 2022-23 financial year.
This time, participants will need only a 2% deposit. To be eligible, you must have at least one dependent child and must not currently own a home.
If you’d like to buy a property through the Home Guarantee Scheme, get in touch and I can talk you through your options.