The Home Guarantee Scheme (HGS)
With the rising cost of living, purchasing a home can seem out of reach for every-day Australians that cannot reach the minimum saving requirements to satisfy the eligibility of loan.
Although Lenders Mortgage Insurance (LMI) is available to those buyers with less than the typically required 20% savings deposit, this is an expensive addition that may be able to be avoided under the Home Guarantee Scheme (HGS).
The HGS is an initiative that supports eligible single parents with dependent children to buy a home with as little as 2% deposit, or eligible first home buyers to buy their first home sooner with a deposit as little as 5% due to the guarantee provided by the National Housing Finance and Investment Corporation (NHFIC).
Essentially, it ensures that the additional 15% is guaranteed to a participating lender by the NHFIC which allows for the higher amount of the loan to be acquired without the need for the costly LMI.
Eligibility criteria applies and a property price cap by suburb exists so that the framework of the policy to “…afford a modest home…” is met.
There are 35,000 places available for this between 1 July 2022 – 30 June 2023. Once you reserve a spot in the scheme through your Participating Lender, you have 90 days to secure a contract for your purchase.
At Grice Legal, we work with industry experts to ensure that you are receiving the most appropriate advice and entitlements for your circumstances. We would be happy to put you in touch with expert Mortgage Brokers to further discuss if you meet the lending criteria and further assist you to buy your family home.
FAQs about the Home Guarantee Scheme (nhfic.gov.au)
Property Price Caps for the Home Guarantee Scheme (nhfic.gov.au)
