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First home guarantee refresher

July 6, 2024

Last week, Housing Australia announced that New Zealand citizens holding a Special Category Visa Subclass 444 (SCV) are now eligible for the Home Guarantee Scheme, provided they meet all other eligibility criteria.

What is a Special Category Visa Subclass 444 (SCV)? Excellent question.

It is a temporary visa for New Zealander that lets you stay and work in Australia as long as you remain a New Zealand citizen. Visa holders can’t travel outside Australia and return on this visa. If you leave Australia the visa will cease. If you return to Australia you must apply for a new SCV when you return. Some of the detail in this is a little ambiguous and we presume more detailed information about eligibility will follow soon, at which time we’ll provide more information.

In this week’s newsletter, we provide a refresher on the current state of the Government’s First Home Guarantee Scheme.

The First Home Guarantee (FHBG) is a Government initiative designed to help eligible first-time home buyers enter the property market sooner. Under this scheme, eligible individuals can purchase a home with a deposit as low as 5% without the need for Lenders Mortgage Insurance (LMI).

The government, through Housing Australia, guarantees up to 15% of the property’s value, making it easier for first-time buyers to secure a home loan.

Benefits:

Low Deposit Requirement: Buyers can secure a home loan with just a 5% deposit.
No Lenders Mortgage Insurance: The government guarantee removes the need for LMI, reducing the overall cost of purchasing a home.
35,000 Places Annually: The number of places available this financial year is 35,000 however the broader government scheme also has an allowance of 10,000 for regional first home buyers, plus 5,000 places under the Family Home Guarantee.

Eligibility Criteria:

Income Limits: Applicants must meet specific income thresholds to qualify for the FHBG.
Property Price Caps: There are limits on the value of properties that can be purchased under the scheme, varying by location to reflect different property markets.
First-Time Buyers: The scheme is exclusively for those buying their first home.
Application Through Participating Lenders: Applicants must apply through lenders participating in the scheme.

Application Process:

Interested buyers should first check their eligibility with us based on the income and property price criteria. If eligible, we will approach a participating lender to begin the application process.

The lender will assess the applicant’s financial situation and we will guide them through the steps to secure a home loan under the FHBG.

Variable

The rates below are based on a $500,000 loan, with the borrower making principle and interest payments with a loan term of 30 years. The rates quoted may vary depending on the borrowers LVR.

1 Year Fixed

The rates below are based on a $500,000 loan, with the borrower making principle and interest payments with a loan term of 30 years. The rates quoted may vary depending on the borrowers LVR. At the end of the three year fixed period, the borrowers interest rate will revert to a standard variable rate for the life of the loan.

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