First Home Guarantee Scheme NSW

When it is time to start looking into buying your first home, plenty of resources and government-supported programs are available to make the process smoother. The First Home Guarantee Scheme (FHGS) NSW is one resource that can help many interested first-time buyers realise their goal of home ownership.

The FHGS NSW relieves eligible first-home buyers of some of the financial burdens of purchasing a residential property. This benefit, amongst many of the others made available by this scheme, will be explored in detail in this article to help you understand and accurately apply for the Australian government initiative. Learn more about FHGS NSW and associated guarantee schemes for first-home buyers.

What is the first home guarantee scheme in NSW?

Typically, buying a home in NSW requires a substantial deposit of at least 20%, lest Lenders Mortgage Insurance (LMI) be applied. Altogether, it is a sizable financial investment, especially for first-time home buyers. That is why the Australian government has initiated a supportive financial scheme for eligible home buyers.

The First Home Guarantee Scheme in NSW fast-tracks the home loan application process for many Australians by providing a low deposit, no LMI, but similar interest rates to loans with a deposit of 20% and higher. This kind of scheme intends to allow more home buyers, especially those at a financial disadvantage like single-parent households, to achieve their goal of home ownership. 

How does the First Home Guarantee Scheme work in NSW?

The Australian government implemented the FHGS to acknowledge the difficulties many first-home buyers experience in securing the funding needed to buy a property. Namely, the funds needed to pay for the minimum deposit of 20% of a property's value that is applied to most NSW properties.

The FHGS can support those from low-to middle-income lifestyles by allowing them to purchase a property with a deposit as low as 5%. This support is available through a panel of participating lenders, which can be contacted directly or through the expert outreach of a first-home buyer mortgage broker .

Investment properties are not included in the FHGS. Regarding the property types to which the FHGS can be applied, the eligibility criteria only include a residential property under the FHGS property price threshold. The property price caps for NSW are $900,000 for the capital city and regional centre, with the rest of the state being capped at $750,000.

However, residential buildings covered by the FHGS can come in various means, such as:

  • A house and land package

  • Land with a contract to build a property on it

  • An existing house, townhouse, or apartment

  • An off-the-plan-apartment or townhouse

Once an eligible property has been chosen and applied, the 5% deposit is subsidised by the financial support of Housing Australia . They provide a guarantee to your chosen lender, covering up to 15% of the property's value or at least covering the remaining percentage of the 20% that first-home buyers cannot afford.

Who is eligible for a First Home Guarantee Scheme in NSW?

In order to be considered eligible first home buyers and to apply for the FHGS in NSW, home buyers must be:

  • An Australian citizen(s) or permanent resident(s)

  • Applying as an individual or as two joint applicants

  • At least 18 years of age

  • Buying an owner-occupied property

  • Buying their first home and have never owned property or land in Australia ten years prior to their home loan application

  • Earning up to $125,000 as an individual or $200,000 as joint applicants, as seen in the Notice of Assessment that is provided by the Australian Taxation Office

How to apply for a First Home Guarantee Scheme in NSW

If you are ready to apply for a first home buyer guarantee, then there is a simple process all applicants must follow. Housing Australia oversees all applications to the FHGS, but you can only begin with the oversight of a participating lender or their authorised representative, a mortgage broker.

Get a Better Rate has the experience and industry expertise to help you apply for a FHGS without complications. They take on the responsibility of organising your application with Housing Australia, simplifying the process into three easy steps:

  1. Consultation: Discuss with your mortgage broker what kind of first property you are looking for, determine how much you can borrow, and discover what participating lenders in the FHGS work with your needs.

  2. Loan approval: Once you have chosen your lender and their home loan product, which may require comparing home loans , your broker will guide you through the loan application process. This includes applying for a loan from a lender and securing a first-home buyer guarantee from Housing Australia. If the FHGS approves you, you have 90 days to purchase your desired home.

  3. Settlement: After meeting the purchase price of your new home, your broker will help to finalise and guide your home loan towards settlement. Get a Better Rate will ensure you take care of the hard work when it comes to determining settlement, so it is only a matter of weeks from loan approval until you can move into your very first home.

Alternate Home Loan Assistance Grants & Concessions

There are more guarantee schemes on offer in NSW if you determine that the first home buyer guarantee scheme is not suitable for your financial or property needs. If you still want to utilise a home guarantee scheme to aid in securing a purchased property, you can look into the following assistance grants and concessions:

Family Home Guarantee (FHG)

This grant intends to support eligible single parents or legal guardians of at least one dependent child in buying a home sooner. Applicants must be Australian permanent residents or citizens and intend to live in the property they apply to as individuals. They must also not be earning more than $125,000 per year.

The FHG allows eligible first-time home buyers to purchase a residential property with as little as a 2% deposit without the need to pay LMI. The other 18% is covered by the scheme's guarantee, which follows a similar convention to the FHGS. Much like the FHGS, applicants must apply with a participating lender or through the efforts of a mortgage broker who can match them to a lender.

Regional First Home Buyer Guarantee (RFHBGS)

The FHGS in NSW may provide most first home buyers with the support required to buy their first residential property, but those in regional areas may require additional help. That is why the Regional First Home Buyer Guarantee Scheme was created as a subsect of the FHGS.

Any eligible regional home buyers can look into applying to the RFHBGS. This scheme allows eligible participants to purchase a rural home with a deposit of as little as 5% without paying LMI. Properties are determined to be regional if they are in a Statistical Area Level 4 region, but you can always check if your chosen property is considered regional .

However, the RFHBGS is only applicable when a loan is taken out with one of the scheme's participating lenders, a list of which can be found here . The lender can then offer a home loan guarantee as high as 15% of the property's value, which is not provided as a cash payment or deposit for the loan.

Secure your first home with the support of Get a Better Rate

For any first home buyer, the process of buying a home can become easier through the support of a government-provided guarantee scheme. The First Home Guarantee Scheme in NSW is one of the most desired financial supports for these buyers, which is why Get a Better Rate has taken the time to learn how best to guide buyers through its application process.

Instead of taking on additional time and stress to research participating lenders in the scheme, and how to apply to the FHGS yourself, allow a professional broker to do it for you. Get a Better Rate has several years of experience as a prominent mortgage broker in Sydney CBD , guiding interested residents through home loan applications, including those who are eligible for the FHGS.

Sit back and enjoy unending support from your first consultation up until you achieve settlement with the experts at Get a Better Rate. Your first consultation is free, and we can discuss how we can secure that dream first home and a suitable home loan product to purchase. Just contact us today to set up your appointment and take that first step towards being a homeowner.


When should I apply for the First Home Guarantee Scheme?

You should consider applying for the FHGS if you have successfully saved up for a minimum deposit of 5%, and know what kind of residential property you wish to purchase. You can also determine when to apply by consulting your mortgage broker, who will have insight into your borrowing capabilities and the current property market.

What are the cons of the First Home Guarantee Scheme?

The cons that come with the FHGS is that the scheme requires you to use all of your savings on the minimum 5% deposit as it prevents homeowners from taking advantage of the low deposit. Such a small deposit also means you may have to pay more interest over the loan's lifetime, which can also affect the costs of monthly repayments.

However, if you are prepared for these financial possibilities, purchasing a new home with a lower deposit can be beneficial in the long term.

Can you buy a house on Centrelink?

You are still eligible for a home loan if you receive Centrelink income, but only from specific lenders and loan products. Lenders tend to be more wary of providing a loan to Centrelink applicants in fear of them not being able to repay a mortgage, so you may need to undergo more assessment from lenders or apply to a loan with another applicant with a full-time job. You are more likely to receive a loan with the latter due to the extra income support.

FHLDS Participating Lenders

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