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The Family Home Guarantee Scheme was released on 1 July 2021 to help single-parent families get into (or back into) the property market. In very simple terms, the scheme allows single parents to purchase an existing house or build a new one with a 2% deposit. Banks and lenders require a minimum of 5% deposit normally, but they also require borrowers to pay lender’s mortgage insurance if they haven’t saved a 20% deposit.
Let’s look at an example of how the Family Home Guarantee Scheme could help a single-parent family living in Queensland. If the family wanted to purchase an existing home valued at $500,000, they would normally need to save a deposit of 20% plus costs to avoid paying lender’s mortgage insurance.
20% of $500,000 is $100,000, so the family would have to save this before purchasing a home. Under the scheme, the family would only need to save a 2% deposit, with the scheme covering the other 18%. This means the family now needs a $10,000 deposit plus other costs such as conveyancing and stamp duty.
Along with the other eligibility requirements, there are price thresholds for houses that can be purchased. These limits are different for each state, based on general market conditions. The table below shows you the price caps for purchasing an existing property in capital cities and regional centres, and also for the rest of the state.
|
STATE or TERRITORY
|
CAPITAL CITY AND REGIONAL CENTRES
|
REST OF STATE
|
|---|---|---|
|
Queensland
|
$600,000
|
$450,000
|
|
Victoria
|
$700,000
|
$500,000
|
|
NSW
|
$800,000
|
$600,000
|
|
South Australia
|
$500,000
|
$350,000
|
|
Western Australia
|
$500,000
|
$400,000
|
|
Tasmania
|
$500,000
|
$400,000
|
|
ACT
|
$500,000
|
---
|
|
Northern Territory
|
$500,000
|
---
|
If you want to apply for the Family Home Guarantee Scheme, you need to do it through a participating lender. Because the scheme is being administered through the National Housing Finance and Investment Corporation, there are 27 participating lenders throughout Australia. The best way to find out which lenders are participating and how you can get the best deal on a home loan is to contact BrokerCo today. Our personalised mortgage broker service is here to help you save time and money while finding your new home.
BrokerCo Pty Ltd ABN 34609806831, Australian Credit Licence 509361
The information contained on this web site is of a general nature only and is not to be taken in any way as specific advice for individual circumstances.
COMPARISON RATE WARNING: This comparison rate is true only for the example given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. The comparison rates are based on a loan amount of $150,000 over a loan term of 25 years.
Copyright © 2018, BrokerCo Pty Ltd. ABN 34609806831. Australian Credit licence 509361