The Australian Home Guarantee Scheme (HGS) is a government initiative that helps eligible borrowers purchase a home with a smaller deposit. The scheme was introduced in 2019 and has been expanded several times since then.
On 1 July 2023, a number of changes to the HGS came into effect, including:
- Permanent residents are now eligible. Previously, the HGS was only available to Australian citizens. However, from 1 July 2023, eligible borrowers who are Australian permanent residents will also have access to the scheme.
- Joint applications are now allowed. Previously, only single applicants were eligible for the HGS. However, from 1 July 2023, two eligible individuals can now apply for the scheme together. This is a welcome change for couples and friends who are looking to buy a home together.
- Previous home owners can now apply. Previously, only first home buyers were eligible for the HGS. However, from 1 July 2023, eligible borrowers who have previously owned a home can also apply for the scheme, as long as they have not owned a property in the past 10 years. This is good news for people who are looking to buy a new home after selling their previous one.
In addition to these changes, the HGS has also been expanded to include 10,000 new places for eligible single parents with at least one dependent child who have a deposit of as little as 2%.
These changes to the HGS make it more accessible to a wider range of borrowers. If you are thinking about buying a home, it is worth checking to see if you are eligible for the scheme.
Can I apply for the Home Guarantee Scheme if I have previously owned a home?
Yes, from 1 July 2023, eligible borrowers who have previously owned a home can apply for the HGS, as long as they have not owned a property in the past 10 years.
This is good news for people who are looking to buy a new home after selling their previous one, or for people who have previously owned a home but have since separated or divorced.
To be eligible for the HGS, you must also meet the following criteria:
- You must be an Australian citizen or permanent resident.
- You must be at least 18 years old.
- You must have a deposit of at least 5% (2% for the Family Home Guarantee).
- You must intend to be an owner-occupier of the purchased property.
If you are interested in applying for the HGS, you should contact a participating lender.
What are the benefits of applying for the Home Guarantee Scheme?
The main benefit of applying for the HGS is that you can purchase a home with a smaller deposit. This can make it easier and more affordable to buy a home, especially in expensive markets.
In addition, the HGS can help you to avoid paying lender’s mortgage insurance (LMI). LMI is a type of insurance that protects the lender in case you are unable to repay your loan. However, it can be expensive, so avoiding LMI can save you a significant amount of money.
How can I apply for the Home Guarantee Scheme?
To apply for the HGS, you must contact a participating lender. A participating lender is a lender that has agreed to participate in the scheme.
You can find a list of participating lenders on the National Housing Finance and Investment Corporation (NHFIC) website.
Once you have contacted a participating lender, they will be able to help you to assess your eligibility for the scheme and to apply for a loan.
The Australian Home Guarantee Scheme is a great way for eligible borrowers to purchase a home with a smaller deposit. The recent changes to the scheme make it more accessible to a wider range of borrowers, including permanent residents, joint applicants, and previous home owners.
If you are thinking about buying a home, it is worth checking to see if you are eligible for the HGS by contacing your Origin Finance Broker by calling 1300 30 6767 or filling in the enquiry form on this page.