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Federal Government Schemes to Help First Home Buyers Crack the Market

Federal Government Schemes to Help First Home Buyers Crack the Market

Australia’s property market has become tighter and more competitive, making it harder for first home buyers to crack the market. Fortunately, potential buyers can apply two federal government schemes to give them a heads up for their new home.

Read more to know whether you or your peers are eligible.


Recently, the Federal Government published a report discussing the New Home Guarantee (NHG) and First Home Loan Deposit Scheme (FHLDS) initiatives.

From the statement, we found that 1 in ten (10) first home buyers (FHBs) benefitted from the said initiatives, and those customers bought their first home within 4 to 4.5 years.


What are the NHG and FHLDS Initiatives?

By definition, the First Home Loan Deposit Scheme allows first-home buyers to purchase a property with as low as a 5% deposit. That is a significant gap from the 20% standard deposit rates without seeking a Lenders’ Mortgage Insurance (LMI).

Buyers can save as much as $40,000 by purchasing a property without paying for LMI.

On the other hand, the New Home Guarantee scheme is similar to the FHLDS but only applies to newly built properties/homes. The NHG also has higher property price ceilings to accommodate the overhead expenses in building a new home.


Who are the Common Beneficiaries of These Schemes?

The younger generation takes the lion’s share of the beneficiaries for FHLDS and NHG schemes. Reports show that about 57% of all recipients are below 30 years old.

Moreover, customers from NSW and Queensland account for about 65% of the initiative’s recipients. It’s also worth noting that more than 56% of FHBs who availed of the schemes have a mortgage broker to help them out.

Aside from that, brokers are also responsible for 72% of grantees for the NHG scheme. That implies the role of a mortgage broker to improve your chances of earning a spot in both grants.


How You Can Apply for FHLDS and NHG

So far, about 2,450 slots are secured out of 10,000 seats for the NHG scheme as of October 2021.

However, the FHLDS is almost complete as early as July 2021, and you may struggle to qualify for a slot without professional help. Out of 10,000 open spots, 7,784 have already been taken.

But if you’re a single parent and want to avail of home loan assistance grants, you can apply for the Family Home Guarantee (FHG). This scheme allows single parents with a dependant to purchase or build a residential property with as low as 2% deposit, LMI-free.

Otherwise, keep in mind that the FHLDS accepts new applicants every year, and the slots will be opened as soon as July 2022. The Federal Government also announced that it will open 10,000 new spots as early as January of the same year.

If you want to know whether you qualify and hope to apply for any of the said home loan schemes, feel free to speak with us today, and we’ll let you know how we can help.



This article presents content in a general nature and is solely for informative purposes only. It does not aim to provide public nor personal financial or tax advice. It does not include nor put into consideration your unique situation or circumstances. Before taking an active decision, seek expert advice and thoroughly examine your current position. Moreover, this article is protected by intellectual property and copyright laws and should not be reproduced without prior written consent.



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