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Home Loan HandbookA successful scheme for first home buyers, the Home Guarantee Scheme, has seen a significant increase in participation over the years. The scheme, which saw one-third of the nation’s first home buyers benefit last financial year, has been instrumental in aiding individuals in purchasing their first homes. This surge in uptake can be attributed to higher interest rates and more inclusive eligibility criteria, making it more accessible to a broader range of prospective homeowners.
In 2023, around 43,800 out of 50,000 available places were utilized by eligible home buyers, marking a 34% increase from the previous year. The scheme’s success has been evident, with the number of first home buyers benefiting from it steadily rising each year since its inception in 2020. Housing Australia, the scheme’s administrator, noted that the expanded eligibility criteria have played a crucial role in supporting individuals facing challenges in the current real estate market.
NAB Executive Business Metro and Specialised, Julie Rynski, emphasized the scheme’s importance in facilitating home purchases for thousands of buyers who may have otherwise struggled due to financial constraints. She highlighted the scheme’s impact on key workers, enabling them to reside closer to their workplaces such as hospitals and schools. Additionally, the scheme has not only accelerated the path to homeownership but has also seen a significant number of participants transition out of the program within an average of two years.
While many aspiring first home buyers have the capacity to service a mortgage, the traditional requirement of a 20% deposit often poses a significant barrier. To address this challenge, Housing Australia collaborates with lenders like NAB to offer loans to eligible buyers who meet income thresholds but lack the necessary funds for a deposit. The scheme’s expansion allows joint applications from friends, siblings, and non-first home buyers who have not owned property in Australia in the past decade.
Under the scheme, Housing Australia provides a guarantee to participating lenders, allowing purchasers to buy homes without the burden of lenders mortgage insurance. NAB Executive Home Ownership, Andy Kerr, commended the scheme’s success in assisting customers in saving for deposits, with NAB alone supporting over 30,000 first home buyers since 2020. Kerr advocated for raising income caps to broaden access to the scheme and improve credit accessibility for Australians responsibly.
In 2024, there was a notable increase in the number of key workers benefiting from the scheme, enabling them to live closer to their workplaces. A survey revealed that the primary motivation for these key workers to choose homes through the scheme was the proximity to their places of work. Victoria led in the scheme’s uptake, indicating its popularity and effectiveness in supporting aspiring homeowners.
The report also highlighted the scheme’s resilience, with a minimal percentage of active loans in arrears and a low portfolio accessing hardship support. Despite rising housing prices driven by strong demand, the scheme continues to provide essential support to first home buyers, offering a pathway to homeownership for many Australians.
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