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Because Australia’s state and federal governments recognise that it can be difficult to buy a home when you’re on a low income, especially if you’re a first-time buyer, there are several schemes and support programs available to make it easier to enter the property market. Further down the track, you may be able to refinance your home loan to an option that more closely matches your financial situation. 

You will still have to go through an application process like with any other loan, with no guarantee of success, but if you’re a responsible borrower who can manage money well, a government loan could help to solve some of your problems. For example, you may be able to buy residential property with a low deposit without having to also budget for lenders mortgage insurance (LMI) in your upfront costs.

The types of Australian government home loans and support schemes you may be eligible for will depend on where you live. Before you apply for any, make sure you do your own due diligence and check the eligibility criteria, such as any property price caps.

Western Australia – Keystart & shared equity

Keystart is a Western Australian scheme designed to help people who are struggling to save a deposit. Some users need a deposit of 2 per cent deposit of a property's value if they are buying in a metro area, or a 10 per cent deposit if they're buying in a regional area. To be eligible, you'll have to meet a set of criteria including being at least 18 years old and intending to use the property as your main home.

Shared equity home loans are also available through Keystart, and work on a shared ownership principal. Loans are made available so that residents can buy a stake in their homes, with the Housing Authority remaining in partial ownership. This arrangement provides some of the security of home ownership and could put you in a better position to buy a home independently in the future.

South Australia - HomeStart Finance

HomeStart Finance is a South Australian scheme that allows some applicants to purchase properties with as little as a 3 per cent deposit. There’s no insurance to pay and initial repayments are worked out based not on the interest rate but on what you can afford.

You’ll need to be over 18 and either have a good history as a renter or have had savings of $3,000 for at least three months, to demonstrate your financial responsibility. These loans are open to Australian citizens, permanent residents and skilled migrants but can only be used to buy a property you’re going to live in.

Queensland - Queensland Housing Finance Loan

Queenslanders are also eligible for a scheme that requires no loan insurance. It’s available with a deposit as low as 2 per cent and there are no monthly fees attached. Payments are based on your income, starting at 30 per cent of what you have coming in and never rising above 35 per cent.

You’ll need to have a good credit record and a good savings history, have the capacity to keep earning for the full term of the loan, and have enough money in your savings to be able to pay for home insurance, stamp duty and legal fees. The loan is only available if you’re a citizen or permanent resident, own no other property and intend to live in the property you’re buying.

All states and territories – First Home Owner Grant and First Home Loan Deposit Scheme

Each of Australia’s state and territory governments offers its own support program for eligible first home buyers. The rules and eligibility requirements for these First Home Owner Grants (FHOGs) vary – you may receive different levels of financial support depending on the type of property you’re buying (e.g. house or unit, established home or off the plan) and its location (e.g. in a capital city, suburb, or regional area). Contact your local state or territory government for more details of what may be available for you in your situation.

Australia’s federal government also offers the First Home Loan Deposit Scheme (FHLDS), administered by the National Housing Finance and Investment Corporation (NHFIC) which allows first home buyers to buy a new home with a deposit as little as 5 per cent of the purchase price and pay no LMI. While this can be very useful in the right situation, it’s important remember that this scheme is only available for buying homes in specific areas, and there are a limited number of participating lenders, so you may not be able to borrow from the lender of your choice. Plus, there are a limited number of scheme places available each financial year – you may need to get in quick if you want to be considered.

Other options

Another potential option is the HomeBuilder grant, which supports new construction or renovation projects for eligible first home buyers and owner occupiers, who can contact their state or territory government to make an application.  

There's also the First Home Super Saver Scheme (FHSSS) - a program where the voluntary after-tax contributions you make towards your superannuation can be used to help you buy your first home. By using your super fund to help you save for a house, you may be able to enjoy tax benefits - contact the Australian Taxation Office (ATO) for more information.