Your Aussie First Home Dream Just Got Closer! The 5% Deposit Scheme is Here

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Are you tired of saving for a 20% deposit while rent prices keep climbing? We’ve got some massive news for you! The Australian Government’s First Home Guarantee (FHG) could be your ticket to home ownership, with a deposit as low as 5%.

What is the First Home Guarantee?

Usually, if you have a deposit of less than 20%, you need to pay Lenders Mortgage Insurance (LMI) – a cost that can add tens of thousands of dollars to your loan. But under the FHG, the Government provides a guarantee to the lender, so you can skip the LMI and buy your home years sooner!

Are you eligible? Here are the key criteria:

• Australian Citizen or Permanent Resident: This scheme is designed to help Australians.

• Income Check: Your taxable income must be at or below $125,000 for individuals, or a combined $200,000 for joint applicants (based on your previous financial year’s Notice of Assessment).

• The 5% Deposit: You must have a minimum deposit of 5% of the property’s value. The Guarantee covers the remaining amount up to a 15% shortfall, which is what saves you from paying LMI.

• First-Time Buyer (or a long time since): You must be a first home buyer, or have not owned a property in Australia in the last 10 years.

• Owner-Occupier: The property must be your new home to live in – not an investment.

• Age: You must be at least 18 years old.

Important Note on Property Price Caps

The scheme has maximum property price caps that vary by location. This ensures the scheme is helping Australians purchase a “modest” home. You’ll need to check the specific cap for the area you’re interested in.

For new builds with vacant land and a separate contract to build, the combined land purchase price and build cost must be under the price cap.

Ready to find out more?

The best way to see if you’re eligible and what you can afford is to speak to a participating lender. They can assess your personal circumstances, confirm the property price cap for your desired location, and walk you through the entire process.

Don’t wait! Your future home could be just a 5% deposit away.