Borrower Lack of awareness of government grants holding back FHBs

As of Juy 1st, 50,000 new places are available to home buyers looking to access a mortgage with a smaller deposit under the three Home Guarantee Schemes.

The federal government’s Home Guarantee Scheme – which encompasses the First Home Guarantee, the Regional First Home Buyer Guarantee, and the Family Home Guarantee has opened up for submissions for the financial year 2025 places.

The government scheme is administered by Housing Australia and enables home buyers to access the property market sooner by accessing a mortgage with a low deposit without having to pay lenders mortgage insurance (LMI).

Instead, eligible home buyers can apply for a loan through one of the 32 participating lenders on the panel, with as little as 5 per cent deposit for the First Home Guarantee or the Regional First Home Buyer Guarantee and 2 per cent under the Family Home Guarantee.

The federal government ‘guarantees’ the rest.

From 1 July there are:

• 35,000 places for the First Home Guarantee (FHBG).

• 10,000 places for the Regional First Home Buyer Guarantee (RFHBG) until 30 June 2025.

• 5,000 places for the Family Home Guarantee (FHG) until 30 June 2025.

Since inception in January 2020, more than 160,000 Australians have already bought or built their own home with support from the scheme.

The Home Guarantee Scheme’s share of the first home buyer market grew significantly in the past few years, with almost one in three first home buyers in 2022–23 supported by the scheme, up from one in seven in 2021–22.

The criteria were expanded last year to enable more borrowers to access the guarantees. This included allowing friends, siblings, and other family members to apply, and opening up the First Home Guarantee to non‑first home buyers who have not owned a property in Australia within the previous 10 years and enabling legal guardians to access the Family Home Guarantee.

However, First Home Buyers may be missing out due to a lack of awareness of government assistance available to them. With the new financial year having started, several federal and state governments have been updating their first home buyer incentives and grants.

However, a recent survey commission by a national mortgage brokerage brand has found that many future home buyers are unaware of the government assistance available to them or not sure how to use them. This is particularly concerning as it may leave some first home buyers feeling as if they cannot afford to buy property.

There are two deterrents that I have found. The first is the maximum income threshold being $125,000-pa for singles and $200,000-pa for couples. The second is the property price cap put in place by the government.

State	Capital City and Regional Centre*	Rest of State
NSW	$900,000	$750,000
VIC	$800,000	$650,000
QLD	$700,000	$550,000
WA	$600,000	$450,000
SA	$600,000	$450,000
TAS	$600,000	$450,000

Given current property prices, the property price cap restricts FHBs for purchasing in their preferred location.

This is where Brokers, like me come in. I have access to a few lenders who offer LMI waiver options for people employed in different sectors offering up to 90% LVR lending with no LMI required. Teachers and first responders to name a few.

If you have a child, nephew, niece or grandchild or even someone in your street that is a potential FHB, please have them contact Phil. The money is there and should be used.

This information has been prepared by PHA Financial Services and does not take into account your objectives, financial situation or needs. Before acting on this information you should consider whether it is appropriate to your situation. We recommend you obtain financial, legal and taxation advice before making any financial investment decision. The information provided was accurate at the time of publication and changes in circumstances after a document is published may impact on the accuracy of information. Some information may have been collated from various third parties and we make no assertion that the information was originally ours.