Major change for first home buyers

Thousands of Australians could benefit as part of the changes to the first homebuyers guarantee, its regional equivalent, and the family home guarantee – to come into effect on July 1.

The first home guarantee, which had previously only been available to married or de facto couples, and singles will expand the definition of a “couple” – opening the scheme up to pairs of friends and family members.

Under the scheme, the federal government acts as guarantor on up to 15 per cent of a loan, allowing prospective buyers the ability to purchase a house with a deposit as low as five per cent.

The scheme also helps home buyers avoid paying lender’s mortgage insurance.

Housing Minister Julie Collins said the road to home ownership, and the makeup of households, had changed and the expansion reflected that.

“We know friends and family members are already teaming up to secure their own place to call home,” she said.

“Our actions will allow them to access vital assistance, just as couples have been able to previously.”

The guarantees will also be expanded to non-first home buyers who haven’t owned a property in Australia in the last ten years.

Ms Collins said the expansion would help those who have fallen out of home ownership, often due to financial crisis or relationship breakdown.

Eligibility for the family home guarantee will also be expanded from just single parents with dependants to eligible borrowers who are single legal guardians of childrens, like aunts, uncles and grandparents.

“These are sensible changes that will help ensure more families have a safe and secure place to call home,” Ms Collins said.

All three guarantees will also be expanded from being available only to Australian citizens to also incorporating permanent residents.

In total, 35,000 first homebuyer spots are available each year, with 10,000 more for the regional first homebuyer guarantee and 5000 for the family home guarantee.