The First Home Loan Deposit Scheme was established as an Australian Government initiative that helped eligible first home buyers purchase a home. Now called the First Home Guarantee, the scheme is designed to help qualified first home buyers get into the property market sooner. 

There has been a lot of talk recently about first home buyers and the difficulties they face when entering the property market and trying to secure a first home purchase.

For many, the biggest obstacle is simply coming up with a deposit. The current housing market is extremely competitive, and prices are rising faster than wages. This means that saving for a deposit can be very difficult, especially if you’re also trying to pay off other loans, debts, or paying rent. 

There are a few ways that first home buyers can try to overcome this obstacle. One is to get help from family or friends. Another is to look for government programs that offer assistance with deposits. It’s also important to remember that there are lenders who are willing to work with first-home buyers and offer low-deposit loans. While it’s not easy to enter the housing market, there are ways to make it possible.

What Is the First Home Guarantee?

Under the First Home Guarantee, eligible homebuyers can apply for a deposit guarantee from the National Housing Finance and Investment Corporation (NHFIC). Under this program, the Commonwealth Government guarantees the difference between what the eligible first home buyer has saved and the 20% deposit threshold lenders usually require before they’ll provide a loan without Lenders Mortgage Insurance (LMI).

This means that eligible homebuyers only need to save a 5% deposit, as the government will guarantee the remaining amount of the deposit required to secure a home loan.

60,000 Places available From 1 July 2022

The government has announced that it will provide 60,000 places each year under various schemes from 1 July 2022. 

• First Home Guarantee: 35,000 
• Family Home Guarantee: 5,000 
• Help to Buy Scheme: 10,000 
• Regional First Home Buyer Support Scheme: 10,000 

Understanding Your Eligibility

Buying a home is a big milestone, and the First Home Guarantee Eligibility Calculator can help you take the first steps. To be eligible for the scheme, borrowers must meet specific criteria, including income and savings tests. The Income Test ensures that borrowers are not earning too much money to qualify for the scheme, while the Savings Test ensures that borrowers have saved enough money for a deposit. 

Applicants must also have a declared income of less than $125,000 (or $200,000 for joint applicants). 

Please note that this doesn’t guarantee your eligibility for the scheme, and doesn’t replace advice from a licensed financial advisor or mortgage broker who can assess your circumstances.

To apply, applicants must meet the following criteria: 

• applying as an individual or couple (married / de facto) 
• an Australian citizen(s) at the time they enter the loan 
• at least 18 years of age 
• earning up to $125,000 for individuals or $200,000 for couples, as shown on the Notice of Assessment (issued by the Australian Taxation Office) 
• intending to be owner-occupiers of the purchased property 
• first home buyers who have not previously owned, or had an interest in, a property in Australia 

When applying, you will be asked to provide information and evidence to support your application : 

• your circumstances – including whether you’re buying alone or with others
• your income
• residency status 
• the property you want to buy – including its location, price, and type. 

The success of your application also depends on the type of property you are looking to buy. The property you are purchasing must be classed as a ‘residential property’ to be considered eligible. Eligible residential properties include:   

• an existing house, townhouse or apartment  
• a house and land package  
• land and a separate contract to build a home  
• an off-the-plan apartment or townhouse   

Further information about the eligibility requirements can be found on the National Housing Finance and Investment Corporation website.

How to apply for the First Home Guarantee Scheme?

To apply for the scheme, an applicant must be an Australian citizen and meet the income and asset requirements. You will also need to save at least 5% of the purchase price as a deposit.

If you’re interested in applying for the scheme, you’ll need to do so through an accredited lender, such as GA Finance. You will be asked to provide evidence of your eligibility, including your ID, income and asset statements, and bank statements. Once your application has been approved, you’ll be able to start shopping for your first home.