FIRST HOME GUARANTEE – BUY YOUR FIRST HOME IN 2023
Ok, let me guess you’re doing your research on buying your first home and all the information is a little bit overwhelming and that’s before you started trying to figure out what schemes and grants you qualify for.
Don’t worry – this is normal. In this video I’m going to give you a rundown of the First Home Guarantee.
What is the First Home Guarantee?
“The First Home Guarantee (FHBG) is part of the Home Guarantee Scheme (HGS), an Australian Government initiative to support eligible first home buyers purchase a home sooner. It is administered by the National Housing Finance and Investment Corporation (NHFIC) on behalf of the Australian Government.” – nhfic.gov.au
For me to explain the FIRST HOME GUARANTEE really well, you probably need to understand how a mortgage works. Let me explain it in simple terms.
5% home loans have been around for a long time now. I’m talking at least 15 years. What that means is you put in 5% of the house however this does not cover all the other costs.
The major cost for most first home buyers is lenders mortgage insurance, this is insurance the bank takes out because your deposit is too small which means there is higher risk to the bank for lending you the money.
The cost of mortgage insurance can be about 4% if you are only putting down a 5% deposit.
This is a massive amount and actually takes a lot longer for the average borrower to save up and get into their first home.
So in comes the federal government with the first home guarantee scheme.
Putting it simply, the government guarantees the loan to the bank. This means the bank does not have to take out lenders mortgage insurance. This means that you only need a 5% deposit.
How to Qualify for the First Home Guarantee:
- There’s an income cap. Single 125k couple $200k
- There’s a price cap. It’s $800k in Melbourne. Varies in regional and different parts of the country
- You must be a citizen. Confusing because other schemes allow PR’s.
*Note: 35,000 FHBG places are available to eligible first home buyers from 1 July 2022 – 30 June 2023
You maybe also be eligible for other grants and schemes and concessions so the best place to start is with a trusted mortgage broker.
Book a no-commitment 15-minute call with us now to have a thorough discussion of the First Home Guarantee or any concern about your home loan needs.
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