Deposit hurdle lowered for first home buyers

FIRST home buyers will be able to enter the housing market with just a five per cent deposit from next month as the new federal government brings forward a loan guarantee. The Albanese Government’s Regional First Home Buyer Guarantee will come into effect Saturday, October 1, which will guarantee up to 15 per cent of a home loan for 10,000 buyers each year.

The government commitment will allow regional first homeowners to get their foot in the door with a five per cent deposit while avoiding paying mortgage insurance. Applicants must be Australian citizens, purchase outside a capital city and prove they’ve been living in the region they’re buying for 12 months to be eligible for the scheme.

Victoria Senator Raff Ciccone said the guarantee was part of the federal government’s “ambitious plan” to tackle housing affordability.

“The Regional First Home Buyer Guarantee will help aspiring first homebuyers living in regional Victoria realise home ownership sooner by overcoming the deposit hurdle,” Senator Ciccone said. The scheme is an expansion of the existing Home Guarantee Scheme but sets aside 10,000 places for people buying in regional areas.

Income and price thresholds apply in line with the existing National Housing Finance and Investment Corporation guidelines; income is capped at $125,000 a year for singles and $200,000 for couple, while property values must be below $800,000 for Geelong.

The scheme was due to start next year but has been brought forward, with the federal government accepting applications from this weekend.

The program is due to last for the next three financial years, until June 2025.