Regional First Home Buyer Guarantee: A Guide
What is the Regional First Home Buyer Guarantee scheme?
The Regional First Home Buyer Guarantee scheme is a government initiative in Australia designed to assist first-time homebuyers in regional areas. This scheme allows eligible individuals to purchase their first homes with a smaller deposit, typically as low as 5%, making it more accessible for them to enter the property market. It aims to encourage home ownership and stimulate economic activity in regional areas by providing this financial support to prospective buyers.
Regional First Home Buyer Guarantee eligibility
To be eligible for the Regional First Home Buyer Guarantee, home buyers, or at least one borrower when applying as part of a pair, must have resided in the regional area or an adjacent regional area they intend to purchase in for the preceding 12-month period before executing their home loan agreement, unless they have been granted an exemption.
To qualify for this federal government scheme, you will also need to meet the following criteria:
- Citizenship or Residency:You must be an Australian citizen or a permanent resident aged over 18.
- First-Time Home Buyer:You should be a first-time home buyer or someone who hasn't owned property in Australia for at least 10 years.
- Intention to Reside:Your intention should be to live in the property you're purchasing.
- Income Limits:Your income should be below $125,000 if you're applying as an individual, or below a combined $200,000 if you're submitting a joint application.
- Property Price Threshold:You must meet the property price threshold specified for the region you're buying in.
Home buyers who do not meet the eligibility criteria for the Regional First Home Buyer Guarantee may still be eligible for other schemes such as the First Home Guarantee or the Family Home Guarantee.
The Home Guarantee Scheme now comprises of:
- Regional First Home Buyer Guarantee - offering 10,000 guarantees each year.
- First Home Buyer Guarantee - offering 35,000 guarantees each year.
- Family Home Guarantee- offering 5,000 guarantees each year.
Regional First Home Buyer Guarantee price caps
State | Regional Centre* | All other Regional Areas |
NSW | $900,000 | $750,000 |
VIC | $800,000 | $650,000 |
QLD | $700,000 | $550,000 |
WA | $450,000 | |
SA | $450,000 | |
TAS | $450,000 |
Let our team of Loans and Mortgages lending experts guide and support you through the loan process. We pride ourselves on being the most trusted and experienced mortgage servicing company in Australia offering services in New South Wales, Victoria, Queensland, Western Australia, South Australia, and Tasmania.
How Does It Work?
The Regional First Home Buyer Guarantee operates by allowing eligible buyers to secure a home loan with a minimum deposit of just 5%. Typically, when borrowing with a low deposit, lenders require borrowers to pay LMI, which can add a significant cost to the purchase. However, with this guarantee, the government acts as a guarantor for the lender, eliminating the need for LMI.Here’s a simple breakdown of the process:
- Find a Property: Look for a suitable property in a designated regional area that meets the price limits.
- Apply for a Loan: Approach a lender to apply for a loan. Inform them that you are seeking the Regional First Home Buyer Guarantee.
- Submit Required Documents: Provide any required documentation to prove your eligibility, including income statements and identification.
- Receive Approval: Once approved, you can move forward with the purchase of your new home!
Benefits of the Regional First Home Buyer Guarantee
The Regional First Home Buyer Guarantee offers several advantages for aspiring homeowners:
1. Lower Deposit Requirements
The most significant benefit is the ability to purchase a home with just a 5% deposit. This lower requirement makes it more accessible for first-time buyers who may have struggled to save a larger deposit.
2. No Lenders Mortgage Insurance
By eliminating the need for LMI, buyers can save thousands of dollars. This financial relief allows you to allocate your funds toward other costs associated with buying a home, such as stamp duty and moving expenses.
3. Support for Regional Living
The initiative encourages people to move to regional areas, helping to alleviate housing pressures in major cities. Living in regional areas often comes with a lower cost of living, better lifestyle options, and a strong sense of community.
4. Increased Homeownership Opportunities
By providing financial assistance to first-time buyers, the Regional First Home Buyer Guarantee increases the chances of homeownership. This support can lead to greater financial stability and personal satisfaction.
Our Thoughts
The Regional First Home Buyer Guarantee is an opportunity for first-time buyers looking to get Dream Home in Australia. With a low deposit requirement and the elimination of LMI, this initiative simplifies the path to homeownership, particularly for those looking in regional areas.
If you believe you qualify for the Regional First Home Buyer Guarantee, it’s time to explore your options. As a mortgage broker, I can assist you in navigating the process, finding the right lender, and ensuring you make informed decisions on your journey toward homeownership. Don’t hesitate to reach out for guidance and support – your dream home may be closer than you think!