Buying your first home can be a daunting experience, as it’s probably one of the biggest purchases you’ll ever make.
So, to support you in your first home buyer journey, the Australian Government launched the First Home Loan Deposit Scheme (FHLDS) and New Home Guarantee (NHG). The Schemes are Government guarantees designed to help first home buyers on low and middle incomes to purchase their first home a little sooner.
We’ve been approved by the Australian Government as a FHLDS and New Home Guarantee lender by the National Housing Finance and Investment Corporation (NHFIC) to offer you this option.
As a member-owned bank it’s our purpose to provide you with better banking products, and being chosen as an approved lender is another reflection of how we can provide this benefit to first home buyers like you.
What is the New Home Guarantee?
As a first home buyer, the scheme is designed to support you by providing a guarantee to your bank that allows you to use a deposit of as little as 5 percent when buying your first home.
Normally, anyone purchasing a property will need to save a 20% deposit (based on the property value) in order to avoid forking out extra to pay for Lenders Mortgage Insurance (LMI). Taking advantage of the New Home Guarantee will allow you to bypass Lenders Mortgage Insurance without having to stress about providing an extra 15% in your deposit.
As a first home buyer you can use the New Home Guarantee in combination with a few other government programs like the First Home Super Saver Scheme, state and territory First Home Owner Grants and stamp duty concessions. However, you will need to keep in mind that limited New Home Guarantee places are available through the NHFIC for the 2020-21 financial year.
Am I eligible?
If you’re a first home buyer looking to take advantage of the New Home Guarantee you will need to check if you are eligible. Use this tool developed by NHFIC to help you work out if you meet the eligibility criteria.
The eligibility criteria will relate to:
- Minimum age
- The Scheme is only open to persons that are 18 years of age or over.
- The minimum age test requires you to be 18 years of age or over at the time you enter into a home loan.
- The Scheme is only open to current Australian citizens.
- The citizenship test for you being an ‘eligible first home buyer’ for the Scheme is that you will need to be an Australian citizen at the time you enter into a home loan with your participating lender.
- If you are applying under the Scheme as part of a couple, you will both need to be Australian citizens.
- The Scheme is not open for permanent residents who are not Australian citizens.
- Income thresholds
- These will be up to $125,000 per annum for singles and up to $200,000 per annum for couples (assessed in the financial year preceding the financial year in which the loan is entered into).
- Couples will only be eligible if they are in a de-facto relationship or married.
- For all Scheme places reserved from 1 July 2021, you will need to provide a copy of your Notice of Assessment from the Australian Taxation Office for the 2020-21 financial year.
- Property prices
- The Scheme is only available for modest homes (a list of the allowable property types is shown below) and will be subject to property price thresholds. For Queensland the price cap will be up to $650,000 for capital cities and regional centres (Gold Coast and Sunshine Coast) and up to $500,000 for other areas in Queensland. For the full list of property price thresholds see here.
- To find out the property price threshold of a suburb you a looking to buy in you can try the NHFIC tool here.
- You must have a deposit of between 5 and 20 per cent of the property’s value. If you have a deposit of more than 20 per cent, then you will be unable to participate in the Scheme.
- You must reside in the property as your principal place of residence (i.e. you must be an owner occupier) within six months from the date of settlement or, if later, the date an occupancy certificate is issued, and continue to live in that property for as long as your home loan has a guarantee under the Scheme.
- Loans under the Scheme require consistent scheduled repayments of the principal of the loan for the full period of the agreement. If the loan is used to purchase both vacant land for the construction of a house on the land, the loan may be an eligible loan even if the terms of the loan agreement permit interest-only repayments for a specified period.
- First home buyers only
- You must be a first home buyer who has not previously owned or had an interest in a property either separately or jointly with someone else.