Want to buy your first home with a deposit of just 5% and pay no lenders’ mortgage insurance? You could be in luck – the federal government will soon reissue up to 4,651 unused Home Guarantee Scheme spots.
First home buyers who use the 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 spots in the scheme once a year (July 1), but this time it’s reissuing guarantees that went begging earlier.
Where are these extra spots coming from?
The government states the scheme will reissue “up to” 4,651 unused guarantees for first home buyers from the 2020-21 financial year”.
It adds many of the spots have been unused because of COVID disruptions, but it’s unclear exactly how many guarantees will be made available.
It’s also unclear exactly when the spots will be reissued, with the government entity overseeing the scheme – the NHFIC – saying it’s working with its panel lenders and “looks forward to reissuing unused guarantees soon”.
All in all, that means we’re going to have pretty short notice of when these spots officially become available to apply for, and they could be in short supply.
So if the guarantee is something you’re interested in, you’ll want to get in touch with us today so we’re ready to act when the spots do drop.
Back up, what’s the Home Guarantee Scheme?
Ok, so the Home Guarantee Scheme is broken up into three separate schemes: two for first home buyers, and one for single parents called the Family Home Guarantee scheme.
At this stage, it’s believed (but not confirmed) that the reissued spots will mainly be for the first home buyers through the New Home Guarantee scheme (new builds) and First Home Loan Deposit Scheme (includes existing builds).
These two schemes allow 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.