First home buyers, regional buyers and single parents keen to crack the property market are the big winners in this year's federal budget - with 50,000 low deposit, no LMI scheme spots up for grabs.
Want to buy your first home with just a 5% deposit and pay no lenders' mortgage insurance?
You could be in luck - the federal government is expanding its hugely popular First Home Guarantee scheme to 35,000 places from July 1, 2022.
First home buyers who use the First Home Guarantee scheme fast track their property purchase by 4 to 4.5 years on average, because the scheme means they don't have to save the standard 20% deposit.
The government usually issues just 10,000 spots for the First Home Guarantee every July 1, but next financial year it's upping the ante.
It's worth noting that the similar New Home Guarantee scheme for first home buyers (10,000 spots for new builds only), isn't expected to continue next financial year.
However, regional buyers (10,000 spots) and single parents (5,000 spots) will benefit from similar schemes, which we'll run through in more detail below.
But first, what's the First Home Guarantee scheme?
Ok, so the First Home Guarantee scheme (previously the First Home Loan Deposit Scheme) allows eligible first home buyers to build or purchase a home with only a 5% deposit, without forking out for lenders' mortgage insurance (LMI).
This is because the federal government guarantees (to a participating lender) up to 15% of the value of the property purchased.
Not paying LMI can save buyers anywhere between $4,000 and $35,000, depending on the property price and deposit amount.
But places in this scheme are on a first-come, first-served basis.
So don't let the expansion to 35,000 spots lull you into a sense of complacency.
They'll go fairly quickly, which means if you're interested, you'll want to get in touch with us asap to ensure you're ready to hit the ground running come July 1.
The new Regional Home Guarantee
Regional homebuyers will benefit from the announcement of the Regional Home Guarantee.
Under the scheme, 10,000 guarantees each year (from 1 October 2022 to 30 June 2025) will be made available to support eligible regional homebuyers.
The good news is that this scheme will also be made available to non-first home buyers, and permanent residents, to purchase or construct a new home in regional areas.
Details on this scheme are still fairly limited, though.
For example, it's not confirmed in the budget papers or ministerial statements whether it will be a 5% deposit scheme like the first home buyer one.
And what's classified as a "regional area" hasn't been disclosed yet, but rest assured we're watching this space closely.
Family Home Guarantee for single parents
For single parents, 5,000 guarantees will be made available each year from July 1, expanding upon the Family Home Guarantee announced in last year's budget.
The Family Home Guarantee can be used to build a new home or purchase an existing home with a deposit of as little as 2%, regardless of whether the single parent is a first home buyer or has owned property before.
Previously, it was planned that just 2,500 spots would be up for grabs each year over four years, so it's good to see the federal government expand this scheme until June 2025.
Get in touch today to get the ball rolling
With these schemes, allocations are generally snapped up fast.
So if you're a first home buyer, regional buyer, or single parent looking to crack into the property market sooner rather than later, get in touch today and we can explain the schemes to you in more detail and help check if you're eligible.
And when the spots do become available over the next few months, we'll be ready to help you apply for finance through a participating lender.
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