New Home Guarantee Scheme

Get guaranteed by the Australian Government and get into your dream home in the South West sooner!

The New Home Guarantee Scheme is an initiative that makes it possible for eligible first home buyers to purchase or build a home with a deposit as low as 5 per cent, without needing to pay lenders mortgage insurance (LMI). Usually a minimum 20 percent deposit is required to avoid LMI, but under the scheme the government will guarantee up to 15 percent of the value of any property purchased with a first home buyer’s loan. This scheme can be accessed in conjunction with other programs like the First Home Owners Grant and stamp duty concessions.

Right now there are currently 27 participating lenders in Australia offering places for the First Home Deposit Scheme. In the 2020-21 Federal Budget the Australian Government announced that there will be an additional 10,000 places available specifically for purchasing or building new homes (known as NHGS New Homes), on top of the normal 10,000 cap – get in quick, the additional places are only available until the 30th June 2021!

Am I eligible?

To receive a guarantee from the Australian government through the New Home Guarantee Scheme, you’ll need to meet certain eligibility criteria:

  • Be an Australian citizen who is at least 18 years of age. Permanent residents are not eligible for the scheme.
  • You must not have previously owned or had an interest in a residential property, either separately or jointly with someone else.
  • If your single your taxable income must not be more than $125,00 per annum, if you’re a couple then your combined taxable income cannot be more than $200,000
  • Couples are only eligible if they are married or in a de facto relationship
  • The scheme only applies to Owner Occupied home loans paid on a principal and interest basis
  • You must have a deposit of between 5% and 20% of the properties value
  • Price thresholds apply depending on the the postcode of your new property – you can see what the cap is in your preferred suburb with the NHFIC’s property price threshold tool

You can only receive the guarantee once, but if you have applied before and were unable to purchase a property you can apply again.

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Am I eligible for the NHGS (New Homes)?

To qualify for the NHGS (New Homes) you’ll need to meet a few extra conditions in addition to the New Home Guarantee Scheme eligibility requirements above.

  • You must be building or purchasing a new home, including:
    • Newly constructed dwellings
    • Off-the-plan dwellings
    • House and land packages
    • Land and a separate contract to build a new home
  • A newly constructed dwelling must be a property that has not been previously rented or live in, built on or after 1 January 2020.
  • An ‘off the plan’ purchase is one where you enter into the contract of sale on or after 7 October 2020 and the title of the home has not yet been issued, or the home has not yet been legally occupied.
  • House and land packages must have a building contract dated on or after 7 October 2020 and construction must commence within six months of you entering into the contract. The home must be completed within 24 months of starting.

How do you apply? 

To get approval for the scheme you’ll need to apply with a participating lender and they will work with you to put together the documentation required to reserve your place. Once you’ve been approved for the NHGS you’ll need to purchase your home within 90 days.

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Ready to get started?

The team at Ventura South West can help. Our in-house finance team can run you through your finance options and will be there every step of the way, from application to approval. So what are you waiting for? Your dream home in the South West is waiting for you.

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FAQ’s

Find the answers to some of the most common questions asked by first home buyers, or get in touch with our expert team to learn more!

What is the New Home Guarantee Scheme?

The New Home Guarantee Scheme is an initiative from the Australian government aimed at assisting eligible first home buyers to purchase a home sooner. It does this by providing a guarantee to your lended to allow you to get a home with a deposit of as little as 5 percent with needing to pay lenders mortgage insurance.

What is Lenders Mortgage Insurance?

Lenders Mortgage Insurance is a one-time payment that borrowers need to pay to their bank when they borrow more than 80 percent of their property’s value. The LMI is there to protect your lender in the event that you default on your mortgage.

What is a guarantee?

Through the New Home Guarantee Scheme, the Australian government provides a guarantee to your lender of up to 15 percent of your property value. It is similar to receiving a parental guarantee and can help first time borrowers get a loan more easily and avoid LMI.

Is the New Home Guarantee Scheme a cash payment?

The scheme is a guarantee, not a cash payment or a deposit towards your home loan.

Are there any costs involved?

There are no costs of funds contributed by the government that you will need to pay back, however you will be responsible for making all the required repayments on your loan.

How long does the guarantee last?

The guarantee will remain in place until you refinance your loan, sell your home or move out or until the balance of your loan reduces to below 80 percent of the value of your property at purchase.

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