New Homes Guarantee scheme
Administered by the Federal Government’s National Housing Finance and Investment Corporation (NHFIC), the New Home Guarantee scheme is open to individuals earning up to $125,000 a year or couples earning up to $200,000 who are looking to purchase their first home.
Under the scheme, first home buyers can apply for a loan through one of the scheme’s 32 participating lenders for the purchase of a property, in the case of Sydney, worth up to $900,000.
Home buyers usually are required to pay lenders’ mortgage insurance (LMI) if they purchase a property with a deposit of less than 20 per cent. But under the scheme, the NHFIC guarantees up to 15 per cent of the value of the property, meaning approved buyers only need to pay a 5 per cent deposit and avoid paying costly LMI insurance.
The number of places under the scheme has now been expanded from 10,000 to 35,000 a year. An additional 5,000 places are open to single parents who will only be required to pay a 2 per cent deposit towards the purchase of a property.
“We expect many more Australians to be able to bring forward buying a home under the expanded scheme,” says NHFIC CEO Nathan Dal Bon.