All You Need to Know About the Regional Home Guarantee Scheme
With the rise in house prices in recent years, it has become increasingly difficult for people to enter the property market. Fortunately, the Regional Home Guarantee Scheme gives people some valuable assistance towards owning a home.
WHAT IS THE REGIONAL HOME GUARANTEE SCHEME?
The Regional Home Guarantee Scheme is designed to help people in regional areas get into the property market without the burden of saving a 20% deposit. While most banks technically only require a 5% deposit, if you haven’t saved 20% of the property price, you would need to pay Lender’s Mortgage Insurance as well. These costs can be prohibitive to many Australians, so the Regional Home Guarantee Scheme has been introduced to ease the pressure. At BrokerCo, our expert Mortgage Brokers can help you with this Government scheme.
The government will act as guarantor for part of the loan, meaning you can purchase a new home with just a 5% deposit and you don’t have to pay LMI. There are 10,000 guarantees available, so let’s see if you meet the eligibility criteria.
HOW IT COULD HELP YOU
The main benefit of the Regional Home Guarantee Scheme is that it allows you to avoid paying Lender’s Mortgage Insurance (LMI) if you haven’t saved a 20% deposit. The amount of insurance you would normally pay can vary depending on a number of factors, but this scheme could potentially save you thousands. Not to mention the fact you don’t need to save a full 20% deposit.
For example, if you want to build a new home in Queensland for $500,000, you’d normally need to save $100,000 to avoid paying LMI. Now, you could build this home with a $25,000 deposit and you wouldn’t need to pay LMI.
ELIGIBILITY CRITERIA FOR THE REGIONAL HOME GUARANTEE SCHEME
There are a few rules associated with the Guarantee, with the main one being that it applies to regional parts of Australia only. It also only applies to new homes, not purchasing existing ones. Here are the main criteria:
It’s important to note that this guarantee is part of the First Home Guarantee, a larger scheme that aims to address housing affordability. As such, there are some additional eligibility requirements:
Price caps by State
The scheme has set some caps on the property purchase price in each state. This has mainly been done so that it can help low-middle income earners, rather than those looking to purchase million-dollar properties. Here are the price caps by state.
| STATE or TERRITORY | CAPITAL CITY / REGIONAL CENTRES | REST OF STATE |
|---|---|---|
| Queensland | $650,000 | $500,000 |
| NSW | $950,000 | $600,000 |
| Victoria | $850,000 | $550,000 |
| Tasmania | $550,000 | $400,000 |
| South Australia | $550,000 | $400,000 |
| Western Australia | $550,000 | $400,000 |
| ACT | $600,000 | — |
| Northern Territory | $550,000 | — |
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info@brokerco.com.au
Maroochydore Homemaker Centre, Level 1/11/55 Maroochy Blvd, Maroochydore QLD 4558, Australia
+61 7 5370 8333