The Home Guarantee Scheme is a government initiative aimed at helping Australians achieve their dream of homeownership sooner. Managed by Housing Australia on behalf of the Australian Government, this scheme provides critical support for eligible first-home buyers, single parents, and regional buyers by reducing the financial barriers to purchasing a home.

What Is the Home Guarantee Scheme?

The Home Guarantee Scheme encompasses several guarantees designed to assist specific groups of buyers:

1.First Home Guarantee (FHBG):

Helps eligible first-home buyers purchase a home with as little as a 5% deposit without needing to pay Lenders Mortgage Insurance (LMI). For FY2024-25, 35,000 places are available.

2.Family Home Guarantee (FHG):

Supports single parents (with or without dependent children) to purchase a home with as little as a 2% deposit, also without LMI. For FY2024-25, 5,000 places are available.

3.Regional First Home Buyer Guarantee (RFHBG):

Aids eligible buyers in regional areas to secure a home loan with a 5% deposit. For FY2024-25, 10,000 places are available.

Eligibility Criteria

Eligibility varies across the three guarantees but typically includes:

Residency: Australian citizens or permanent residents (specific guarantees may require citizenship). Income: A maximum taxable income of $125,000 for singles or $200,000 for couples (for the previous financial year). First-Home Buyer Status: For the FHBG and RFHBG, you must not have previously owned property in Australia.

Each guarantee also has specific property price caps depending on the location, so it’s essential to check the limits in your desired area.

How the Scheme Works

The government acts as a guarantor for up to 15% of your home loan, allowing you to secure a mortgage without paying LMI. For example, with a 5% deposit, the government covers the remaining 15%, so you meet the 20% equity threshold required by most lenders to avoid LMI. The scheme is available through a network of participating lenders, including major banks and smaller institutions.

How to Apply for the Home Guarantee Scheme

1.Check Your Eligibility:

Determine which guarantee you qualify for based on your circumstances and the property you wish to purchase.

2.Speak to a Mortgage Broker:

A broker can guide you through the application process, help you choose a participating lender, and ensure your financial documents are in order.

3.Submit Your Application:

Applications must be made directly through participating lenders. These lenders will assess your eligibility and coordinate the scheme’s approval process.

Maximise Your Home Buying Benefits

The Home Guarantee Scheme can be used in conjunction with other government incentives, such as:

First Home Owner Grant (FHOG):

A one-off grant for first-home buyers purchasing or building a new home.

Stamp Duty Concessions:

Reductions or exemptions for first-home buyers depending on the state or territory.

First Home Super Saver Scheme (FHSSS):

Allows you to withdraw extra super contributions for a home deposit.

How North Rocks Mortgage Solutions Can Help

At North Rocks Mortgage Solutions, we specialise in guiding clients through complex government schemes and simplifying the home-buying journey. From eligibility checks to lender negotiations, we ensure you take full advantage of the Home Guarantee Scheme and other available incentives. Contact us today to learn how we can help you secure your dream home with confidence.

FAQ

What is the ‘Guarantee’ provided by Housing Australia?

Do I have to repay Housing Australia?

Can I purchase a property from a family member?

Does the scheme waive stamp duty?

Can I apply for a loan with someone else?

Can I use the Guarantee to build on land I already own?

How long does the Guarantee remain in place?

When do I need to move in?

What if I move out of the property?

What happens if I sell the property?

Are there special provisions for Australian Defence Force members?

The Guarantee bridges the gap between a buyer’s deposit (2% or 5%) and 20% of the property’s value. This reduces upfront costs by avoiding Lenders Mortgage Insurance LMI).

No, there are no repayments for the Guarantee itself. You are responsible for all home loan costs and must comply with the scheme’s conditions.

Yes, transactions with family members are allowed if the purchase price is within the applicable price cap for the location.

No, Housing Australia does not manage or waive stamp duty. Many states and territories offer stamp duty exemption and concession for first-home buyers. You can use the stamp duty calculator on our website to estimate how much you need to pay.

First Home Guarantee (FHBG) or Regional First Home Buyer Guarantee (RFHBG): You can apply individually or jointly with someone else (e.g., spouse, partner, sibling, or friend).
Family Home Guarantee (FHG): Only eligible single parents or single legal guardians can apply as individual applicants.

Yes, the Guarantees are available to Australian citizens and permanent residents. Joint applicants must both meet this criterion.

No, current property ownership disqualifies you from the Guarantees. Exceptions apply for the Family Home Guarantee if you sell or transfer your existing property.

The Guarantee ends when:

The loan is refinanced.
The home is no longer owner-occupied.
The loan balance reduces below 80% of the property’s value at purchase.

You must occupy the property within six months of settlement or, for new builds, once an occupancy certificate is issued.

If you rent out the property, the Guarantee may end, and additional lender requirements like LMI may apply. Temporary absences without renting out the property are generally acceptable. Defence Force members may qualify for exemptions based on their duties.

You can sell your home at any time. The Guarantee will cease once the property is sold.

Yes, Defence Force members are required to be owner-occupiers but may qualify if their duties prevent occupancy, provided they intended to live in the home when the loan was taken.

Author:

Cordelia Jia

Founder & Finance Broker

Cordelia holds a Master of Professional Accounting and a Diploma of Finance and Mortgage Broking Management. With over a decade of experience in the financial service industry, she is a seasoned expert and a reliable partner in navigating your loan journey.

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