first home buyers
First home buyer guide: grants, schemes and incentives
Getting your first foot in the property ladder is the hardest with saving for a deposit being the biggest challenge. We understand that taking the first step towards homeownership exciting whilst daunting, which is why our team is here to guide you every step of the way. Our brokers will assist you in navigating various deposit grants/schemes offered by state and federal governments including the First Home Owners Grant, Stamp Duty Relief for First Home Buyers and the First Home Guarantee .If a client is not eligible we will look at other options available including family guarantors, low deposit lenders, lender mortgage insurance (LMI) & LMI waivers specialist professional. Our in-depth knowledge allows us to navigate various deposit schemes, ensuring you access the best financial opportunities available and we simplify the process, provide tailored solutions, and making the dream of owning your first home a reality.
First Home Owner Grant
If you are a first home buyer you may be eligible for the first home owner grant of up to $15,000, if you are: buying or building a new home* (including a house, flat, unit, townhouse or apartment) in South Australia; and that home will be your principal place of residence. * New home – a home that has not been previously occupied or sold as a place of residence, including a substantially renovated home.
Eligiblity for the grant is subject to conditions including the market value of the property is $650,000 or less where the contract was entered into on or after 15 June 2023, you or your spouse/domestic partner have not held a relevant interest in an Australian residential property prior to 1 July 2000 & at least one applicant is an Australian citizen or permanent resident. Further Eligibility requirements exist
In the majority of case you do not have to apply for the grant yourself, your choosen lender will complete this on your behalf. The Grant can be utilises as part of your deposit.
Learn more about First Hown Owners Grant (FHOG)
First Home Guarantee (FHBG)
The First Home Guarantee (FHBG) is part of the Home Guarantee Scheme (HGS), an Australian Government initiative to support eligible home buyers to buy a home sooner. When you apply for a loan you are required to come up with and put down a deposit of 20%, which with rising property prices can be very challenging. If you put down less than a 20% deposit, you're liable to pay for something called Lenders' Mortgage Insurer(LMI). This is insurance to protect your lender in case you can't make your mortgage repayments – and it can be expensive. To help you avoid paying for LMI, if you can provide a minimum of 5% of your home loan value as a deposit and apply to borrow through an approved lender the Australian Government will guarantee up to 15% of the value of the property. This doesn't mean that the Government pays for the remaining part of your deposit, they are effectively your LMI insurer. There is no cost to you however their are limited spots each year and is subject to eligibility requirements such as price caps, current $600,000 in SA Capital City & $450,000 the rest of the state.
Example:
Bill and Jill are planning purchasing an established property for $600,000 and are eligible for the First Home Guarantee Scheme (No LMI). They require a deposit of at least 5% ($30,000) and as it is an established dwelling they are required to pay stamp duty ($26,000). So $56,000 up front would be needed. Their new home loan would be $570,000, at 6% interest repayments would be of $1576 per fortnight.
Learn More about First Home Guarantee
Stamp Duty Relief for First Home Buyers
In South Australia, first home buyers may be eligible for stamp duty relief that either completely or partially reduces the stamp duty fee. At the time of settlement (when the land you have purchased transfers to your name), you are required to pay stamp duty on the transfer of land. The amount of stamp duty you need to pay is based on the value of the land purchased and any improvements made on that land. If you are a first home buyer and eligible for the stamp duty first home buyer relief, the relief may: reduce your stamp duty to zero if the value of your new home is below $650,000 (or $400,000 for vacant land): or partially reduce your stamp duty if the value of your new home is below $700,000 (or $450,000 for vacant land). Stamp duty relief for eligible first home buyers applies to contracts entered into on or after 15 June 2023. Further Eligibility requirements exist.
Learn more about Stamp Duty Relief
Guarantor Loans
If you don't have enough deposit but do have the ability to make the required home loan repayments, a guarantor could help you to secure additional funds to buy a home. A guarantor home loan works as a way to get into the market sooner. You may only need a small deposit or in some cases, you may not need a deposit at all. That’s because a guarantor – usually a family member, offers equity in their own home as additional security for your loan. A guarantor home loan is also a way to avoid the cost of lenders mortgage insurance (LMI), which can be a saving of thousands of dollars.
Example:
Bill and Jill are planning to purchase a property for $800,000 and have saved a deposit of $80,000 which is 10% of the property’s value, as they don't have at least 20% ($160,000), the lender require them to pay LMI. Instead of waiting to save an additional $80,000 or pay LMI, a guarantor home loan can offer a solution. The guarantor offers $80,000 of their own home equity as extra security for their loan which gives Bill and Jill the 20% security they need to buy the property today without paying LMI. The guarantor isn't required to make any payments on your loan, but if Bill and Jill can no longer keep up your repayments, the lender will turn to the guarantor to make the repayments or sell the property and could seek any losses from the guarantor.
Low Deposit Lenders - HomeStart SA
Established in 1989, HomeStart is a State Government organisation that is 100% focused on providing home loans for South Australians. HomeStart offer Low Deposit Home Loan to buy an existing or newly completed home in metropolitan South Australia with a smaller deposit. The deposit can start from as little as 3% of the purchase price to buy an established or newly completed home, with no Lenders Mortgage Insurance (LMI). However as a result you are paying an interest rate of around 1.5-2% higher than the market average. We will assess your situation to see if it best to utilize this service.