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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.
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.
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.
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
|
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|
|
Northern Territory
|
$550,000
|
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|
BrokerCo is a convenient online service that provides you with a real mortgage broker to assist in making your new home dreams a reality. As experts in home loans, we don’t just find the best deal for you. We also help guide you through the process, particularly if you are eligible for any Government schemes like the Regional Home Guarantee.
Contact the friendly team at BrokerCo today. We offer a personalised service that’s all about your needs.
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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.
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