First Home Guarantee Scheme Queensland Guide 2024

What is the First Home Owners Guarantee Scheme (FHBG) in Queensland 2024?

The First Home Guarantee (previously called the First Home Loan Deposit Scheme FHLDS) is available for eligible purchasers of their first home to get into the property market by paying only a 5% deposit on their mortgage with the Queensland Government’s Aid. It is organised by Housing Australia on behalf of the Australian Government. It is referred to as the FHBG.

What are the benefits of the FHBG?

The scheme offers three primary advantages:

1. it facilitates a faster property market entry by requiring a reduced initial deposit from potential home buyers.

2. It enables eligible home buyers to avoid paying Lenders Mortgage Insurance (LMI).

3. It provides access to lower interest rates typically reserved for purchasers with a more substantial initial deposit.

What is LMI?

LMI, or Lenders Mortgage Insurance, is a single insurance payment that safeguards the lender if you are unable to make your home loan repayments. Typically, this insurance comes into play when you borrow more than 80% of the property's value. However, with the First Home Guarantee, the Government takes on the role of underwriting your home loan and acts as a guarantor, eliminating the need for you to bear the cost of LMI.

Normally, you would have to save up a minimum of 20% of the home's price to steer clear of the extra cost of lenders mortgage insurance (LMI). This insurance is a one-time payment added to your loan. However, with the scheme, you dodge the need to pay LMI fees because the government steps in to offer a guarantee covering up to 15% of your home's value.

What are the limits of the First Home Guarantee Scheme?

There are a few restrictions to be aware of:

● You must be residing in the property.

● This scheme is not applicable for investment properties.

● There are caps on the prices of eligible properties.

● The availability of spots in the scheme is limited to 35,000 per financial year.

What changes have been made to the Home Guarantee Scheme FHBG for Queenslanders in 2024?

The new updates to the FHBG are:

● Whether you are friends, siblings, or other you have the chance to join forces and apply for both the First Home Guarantee and the Regional First Home Buyer Guarantee.

● Even if you’ve owned a property before you are eligible if it has been at least 10 years since you owned property.

● Single legal guardians of children including aunts, uncles, and grandparents are now welcome to the Family Home Guarantee

● For permanent residents you are eligible to apply for any of the three schemes including: the First Home Guarantee, Regional First Home Guarantee and the Family Home Guarantee. These Guarantees were previously restricted to married or de-facto couples, in addition to single applicants.

Who is the FHBG available for in Queensland?

The FHBG scheme is designed for lower to middle income earners, with income caps that differ if you are a single person applying or as part of a couple together.

The income cap of $125,000 maximum taxable income applies if you are single and a cap of $200,000 if you are applying with another person.

Your Home Loan and Home Guarantee Scheme Application will still be subject to regular home loan considerations like borrowing capacity, credit checks, and suitable employment.

How to apply for the First Home Guarantee?

Send your application directly with one of the Scheme’s participating lenders or through a mortgage broker.

Who is eligible for the FHBG in Queensland? 

Your Eligibility Test Here

Conditions of Eligbility: 

● Joint applications

● Prior ownership

● Citizenship

● Owner occupied

FHBG Income Test in Queensland: For individuals your taxable income must be below $125,000, and for couples, it must be below $200,000 for the previous financial year. It's important to keep in mind that when you apply for a spot in this scheme, you will be required to provide the Notice of Assessment from the Australian Taxation Office (ATO) for the previous financial year.

Joint applications for the FHBG: Before July 1 2023 only couple were able to apply if they were married on in a defacto relationship. Now any two eligible applicants may apply together including friends, siblings or other family members.

Previous property ownership: You must provide proof that for the past ten years you have not owned or held part interest in property in Australia. This also includes commercial, investment or company title properties.

Citizenship: If you're applying before July 1, 2023, you must be at least 18 years old and an Australian Citizen. However, starting from July 1, 2023, the scheme will extend its eligibility to Australian Permanent Residents who meet the criteria.

Owner Occupied: Upon becoming a homeowner, you're required to reside in the property within six months. It's essential to continue living in that property for as long as your home loan is guaranteed under the Scheme.

What are the property price caps for the First Home Guarantee Scheme in Qld in 2022 to 2024?

The property price cap limit is $700,000 for Queensland capital city of Brisbane and regional centre and $550,000 for the rest of the Queensland state.

What are the changes in the names for the First Home Guarantee Scheme since 1 July 2022?

First Home Loan Deposit Scheme (FHLDS) has become First Home Guarantee FHBG.

How is the Home Guarantee Loan assessed in Queensland?

Your Home Guarantee loan will undergo an assessment based on various factors, including your income, the loan amount, and your past financial history related to home purchases.

To ensure eligibility for the loan, it's important to meet certain criteria, such as: The loan qualifies if the Loan to Value (LVR) ratio falls between 80% to 95%. The property's value should not surpass the specified price cap for the particular area.

Your application should be made through one of the 32 lenders authorised to offer the scheme.

Both applicants, in the case of two borrowers, must meet the eligibility criteria as first-time home buyers.

The loan must be intended for a residential property.

The application can have a maximum of two borrowers; no more are allowed. The residential property linked to the loan must be for owner occupation. The loan term should not extend beyond 30 years.

If you're looking for premium conveyancing at an affordable price talk to our specialised conveyancers today to receive your free fixed quote and answer any questions for your future purchase of a property, house, unit or land in Brisbane or the Queensland state at 07 3013 2300. 

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