Applications open for Regional First Home Buyer Guarantee

Regional Australia First Home Buyer Guarantee

Here’s some great news for regional Australians who want to get on the property ladder: 10,000 new places are now available under the federal government’s Regional First Home Buyer Guarantee.

The scheme began on 1 October 2022, three months ahead of schedule.

With many young Australians making the move to the regions, here’s everything you need to know about the Regional First Home Buyer Guarantee.

What’s the Regional First Home Buyer Guarantee?

The Regional First Home Buyer Guarantee Scheme is an expansion of the federal government’s existing Home Guarantee Scheme,

It helps 10,000 regional Australians each financial year (up until 30 June 2025) enter the property market with a deposit of as little as 5%.

How does the Regional First Home Buyer Guarantee work?

Typically, when you borrow more than 80% of a property’s value (so your deposit is less than 20%), you have to pay lender’s mortgage insurance (LMI).

However, under the scheme, the federal government will provide a guarantee of up to 15% of a property’s value (as assessed by the home loan lender), so you can borrow up to 95% of a property’s value while avoiding LMI. This could save you up to $32,000, according to government calculations.

What are the eligibility requirements?

To be eligible, you must first meet the general requirements of the First Home Guarantee scheme.

Applicants must:

  • Be Australian citizens
  • Be at least 18 years of age at the time they enter the home loan
  • Be first home buyers
  • Intend to live in the property
  • Earn up to $125,000 for individuals or $200,000 for couples

On top of this, you must also have been living in the regional area (or adjacent area) where the property is located for at least 12 months.

What about price caps?

While a wide range of properties can be bought under the scheme – including existing dwellings, off-the-plan apartments or townhouses and house-and-land packages – property price caps apply, which differ depending on the region.

You can use this postcode search tool to look up price caps by location.

Saving the best for last

The launch of the Regional First Home Buyer Guarantee comes at a time when soaring property prices in the regions are faltering after the recent boom.

What’s more, listing numbers are increasing while demand drops, resulting in a buyer’s market in many locations. That’s led to an increase in vendor discounting, with CoreLogic reporting the average discount has increased to 4.2% over the September quarter – up from the recent low of 2.9% recorded in the three months to November last year.

As a result, first-home buyers now have the opportunity to purchase a property at a discount, compared to earlier in the year.

Want to break into the property market? NMC Finance is an experienced home loan mortgage broker who can help. Contact Nathan Coad on 0498 766 639 or to find out more.

* This blog is intended for general informational purposes only. For personalised advice tailored to your unique financial situation, please contact NMC Finance.

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