What if you have less than a 20% deposit for a home?
The journey to homeownership is an exciting yet daunting venture. Saving a big 20% down payment for a desirable home feels impossible for many hard-working buyers nowadays, especially with the rising interest rates and cost of living.
Traditionally, a 20% deposit was considered the gold standard for property purchases. However, in today's dynamic market, buyers often choose to enter the market with a lower deposit rather than waiting. This is particularly true as house prices tend to rise swiftly, making it challenging to save at the same pace.
If you have cash saved up anywhere between 5% and 20% of the property value you’re aiming for, mapping out your borrowing capacity and loan structure in advance will help you gain confidence in your purchasing plan.
Additionally, the federal government along with the state/territory governments have recognized this challenge and implemented incentives to help further ease that burden of the 20% rule. These programs can provide a much-needed boost to make buying a home more accessible. How do you know if you’re eligible for family guarantees or first-home buyer programmes?
Source: https://www.housingaustralia.gov.au/support-buy-home
The Family Home Guarantee (FHG) in Australia has the following eligibility criteria:
The applicant must be a single parent or single legal guardian of at least one dependent.
The applicant must be an Australian citizen or permanent resident.
The applicant must be at least 18 years of age.
The applicant’s taxable income must not exceed $125,000 per year.
The applicant must not own property at the time of the application.
The property to be purchased must be a residential property.
The First Home Guarantee (FHBG) in Australia has the following eligibility criteria:
The applicant must be an Australian citizen or permanent resident.
The applicant must be at least 18 years of age.
The applicant must be applying as an individual or as two joint applicants.
The applicant’s taxable income must not exceed $125,000 for individuals or $200,000 for joint applicants.
The applicant must intend to be the owner-occupier of the purchased property.
The applicant must be a first-time homebuyer or a previous homeowner who hasn’t owned a property in Australia in the past ten years.
First Home Owner Grants
The grant amount varies across the country, with some locations being more generous than others. In Victoria and Northern Territory it's $10,000, while Tasmania offers $30,000, for instance. Review your local FHOG details, but keep in mind there are also income caps and purchase price limits involved. The funds can make a meaningful dent in your upfront costs.
Our specialists at Investors Mortgage closely track all available government homebuyer assistance programs across Australia. Allow us to analyze your specific situation and map out a plan for tapping into the incentives that can boost your homeownership dreams. Book a consultation today to get started.
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