Update on the New Home Guarantee in 2022

The New Home Guarantee will end on June 30, 2022, as announced in the 2022-2023 Federal Budget. The New Home Guarantee (NHG) is no longer available for new applications from 1 July 2022. A NHG place reserved on, or before 30 June 2022, will still be able to progress to settlement, subject to meeting eligibility criteria and NHG requirements and timelines.
Property price cap increases for cities and regions will come into effect.
However, if you are a first home buyer who wants to build or buy a new home, you may still be able to get help to buy a new home with a lower deposit with the First Home Guarantee. The government has made 35,000 places available through the First Home Guarantee each financial year.

The New Home Guarantee Scheme (FHLDS) is a government programme that allows first-time property purchasers to build or purchase a newly built home, with as little as a 5% deposit and avoid paying Lenders’ Mortgage Insurance (LMI). LMI is an insurance payment that protects the lender in the event that you miss a payment on your home loan. It is generally applicable when borrowing more than 80% of the property’s worth, but with the New Home Guarantee (FHLDS), the government will underwrite your home loan and act as a guarantor, ensuring that you do not have to pay LMI.

The New Home Guarantee scheme has several ‘expansions’ to it which fall under First Home Guarantee benefiting first home buyers, the Family Home Guarantee supporting single parents, and the Regional Home Guarantee, a scheme that allows eligible participants who have not owned a home for at least 5 years and are looking to purchase a new home in a regional location.

*the New Home Guarantee ends 30 June 2022. If you are a first home buyer looking to build or purchase a new home, you may still be eligible to purchase a new home with a lower deposit. This may be possible through the Government’s First Home Guarantee

What is the First Home Guarantee Scheme?

The FHBG allows eligible first home buyers on low and middle incomes to purchase a home with a deposit of as little as 5%.
Lender’s Mortgage Insurance (LMI), which you usually have to pay if your deposit is less than 20%, is resolved of by the guarantee. Under the First Home Guarantee (FHBG), part of an eligible first home buyer’s home loan from a Participating Lender is guaranteed by NHFIC.

The First Home Guarantee (FHBG) has opened up 35,000 spots for each financial year. These places help people who are eligible buy a new or existing home for the first time.

Eligibility for the First Home Guarantee Scheme

To qualify for the scheme, you’ll need to meet the list of eligibility criteria below:

The Person
  • You are buying a home for yourself or to live in with your spouse or de facto partner.
  • You are buying your first home.
  • You earn less than $125,000 in a tax year (as an individual) or less than $200,000 (as a couple).
The Property
  • A residential property
  • If you’re building, the loan must covers the costs of the land as well as construction costs
  • You stay below the price caps for each state/region
  • You need to get a loan with principal and interest (no Interest-Only loans)

The Family Home Guarantee is a new Scheme from the Australian government that helps eligible single parents buy a home for their family. Single parents who are eligible will be able to get into or back into the housing market with as little as a 2% deposit.

5,000 Family Home Guarantees will be available for eligible single parents with at least one dependent child each financial year until 30 June 2025.

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