All You Need to Know About the Family Home Guarantee Scheme

You’ve probably heard about the Family Home Guarantee Scheme and wondered if it can benefit you. Here’s everything you need to know!

WHAT IS THE FAMILY HOME GUARANTEE SCHEME

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.

Family home guarantee scheme

HOW IT CAN HELP A SINGLE-PARENT FAMILY

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.

ELIGIBILITY REQUIREMENTS FOR THE FAMILY HOME GUARANTEE SCHEME

  • You’re an Australian citizen over the age of 18
  • You’re a single parent with one or more dependent children
  • Your income for the previous financial year was less than $125,000
  • You have saved 2% of the property’s value, plus other upfront costs such as stamp duty
  • You intend to live in the house you’re buying
  • You don’t currently own a home, investment property or other land titles

WHAT TYPES OF HOUSES CAN YOU BUY?

  • A house, townhouse or apartment
  • A house and land package
  • An off-the-plan apartment or townhouse
  • Land, provided you have a separate contract to build a home on the land
  • You intend to live in the house you’re buying

PRICE CAPS BY STATE

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 TERRITORYCAPITAL CITY / REGIONAL CENTRESREST 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

HOW BROKERCO CAN HELP

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 the Sunshine Coast Mortgage Brokers at BrokerCo today. Our personalised mortgage broker service is here to help you save time and money while finding your new home.

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