Single Parents & More - A Comprehensive Look At Government Property Buyer Schemes

Single Parents & More - A Comprehensive Look At Government Property Buyer Schemes

The 2021 Federal Budget is out and single parents struggling to get a foot on the property ladder are in luck, with a new scheme introduced that may allow them to purchase property with a deposit of only 2 per cent.

This scheme, called the Family Home Guarantee, will see the remaining 18 per cent of a home loan deposit needed to avoid Lender’s Mortgage Insurance (LMI) guaranteed by the Federal Government.

Family Home Guarantee will be available for up to 10,000 single parents with dependants over four years, as of 1 July 2021. The scheme is available to those with a household income under $125,000

As property prices have continued to grow across the country, particularly in Sydney and Melbourne, the cost of a deposit has continued to slip out of many would-be buyers hands.

For example, based on the latest CoreLogic data showing a median-priced Sydney unit to be $771,859, a buyer would need to save at least $154,371 for a 20 per cent deposit. This doesn’t include the cost of stamp duty, as well as other mortgage application costs.

This scheme is similar to other buyer support schemes, such as the First Home Loan Deposit Scheme, in that the government is helping buyers struggling to afford 20 per cent deposits

Government property buyer schemes available

While the Family Home Guarantee may help single parents, it’s not the only government scheme available. Australians looking to buy may have other options from the government, including property purchasing schemes, grants, concessions, and exemptions that may be available to would-be buyers.

1. Family Home Guarantee

Available for single parents with an income cap of $125,000, the Family Home Guarantee helps applicants with deposits as small as 2 per cent meet eligibility criteria to qualify for a home loan. The guarantee is available from 1 July 2021, with only 10,000 places available over the next four years.

2. First Home Loan Deposit Scheme (FHLDS)

This government initiative specifically targets first home buyers. Similar to the Family Home Guarantee, it supports buyers with deposits under 20 per cent (up to 5 per cent) to purchase property without having to pay LMI. Here, the Australian government also acts as a guarantor.

Key conditions for FHLDS include income caps of $125,000 per annum, capped at $200,000 for couples), with enrolment into the FHLDS capped at 10,000 per financial year. As per the latest Federal Budget announcements this week, the scheme has been extended by another 10,000 places in 2021-2022.

3. First Home Super Saver Scheme (FHSSS)

Another scheme targeted at first home buyers, FHSSS allows eligible home buyers to make extra contributions into their super fund with intent to be used towards a property deposit. Previously, first home buyers could withdraw up to $30,000, however the latest Federal Budget has revealed the scheme will be increased to $50,000 from 1 July, 2022.

As interest rates are at an historic low across savings accounts and term deposits, using your super fund to try and take advantage of higher rates of return may prove to be a faster option than waiting for your deposit to grow in a saver account.

4. First Home Owner Grant

One of the original home buyer schemes, originally introduced on 1 July 2000 to offset the effect of GST on home ownership, First Home Owner Grants differ per Australian state or territory. A one-off grant is paid to eligible first home buyers, with conditions around property values and residential requirements common.

5. Stamp duty concessions and exemptions

Stamp duty is one of the biggest upfront costs associated with purchasing property outside of the deposit, so it’s beneficial that struggling first home buyers are offered assistance in this category too. First home buyers may be eligible for stamp duty concessions or exemptions depending on a range of factors, including the state or territory of the purchased property and the value of the property.

What first home buyer assistance do I qualify for in my state or territory?

As mentioned above, the First Home Owner Grant and stamp duty concessions and exemptions differ per state and territory in Australia.

Here is what your state or territory is currently offering first home buyers:

STATE OR TERRITORY First Home Owner Grant Stamp Duty Concessions Stamp Duty Exemptions
New South Wales $10,000 towards purchase price. Must be buying or building your first home. Not for existing dwellings. Value cap of $750,000 New home: $800,000 - $1,000,000.

Existing home: $650,000 - $800,000. Waived rate based on value of home

New home: up to $800,000

Existing home: up to $650,000

ACT N/A Value of property: $500,000 and above - off the plan units up to $11,400 stamp duty reduction. Value of property: up to $500,000 for off the plan units, full exemption for single resident dwelling blocks.
Victoria $20,000 for regional property, $10,000 towards non-regional property. Value cap of $750,000 Value of property: $600,001 - $750,000. Waived rate based on value of home. Exemption for property value up to $600,000
Queensland $15,000 for new purchases and constructions up to $750,000 Home concession—when buying another home after your first home.

First home concession—the lower home concession rate of duty plus a further rebate that may result in you paying no duty (when you have never owned a home before)

First home vacant land concession— the normal rate of duty plus a further rebate that may result in you paying no duty (when buying land to build your first home)

Exemption from transfer duty on transactions involving a transfer of an interest in your home to your spouse or change of tenure between joint tenants and tenants in common manufactured home.
South Australia Up to $15,000 for new purchases and constructions less than $575,000 N/A N/A
Tasmania $20,000 if building new residence or purchasing new build. Established home: concession of 50%, Value of $400 000 or less.​​​ Duty exemptions available when property is transferred between partners in a marriage, a significant relationship or a caring relationship.
Western Australia $10,000 for new purchases. Property prices capped at $750,000 for South of the 26th parallel and $1m for north of the 26th parallel Value of property: $430,001 - $500,000 - $19.19 per $100 above $430,000 Value of property: up to $430,000
Northern Territory $10,000 if building new residence or purchasing new build. Value of property: up to $650,000 - $18,601 off stamp duty. Available until 30 June 2021. Value of property: up to $650,000 - $18,601 off stamp duty. Available until 30 June 2021.

Source: RateCity.com.au, State Revenue Websites for each state and territory. Data accurate as of 13.05.2021.

Did you find this helpful? Why not share this news?

Advertisement

RateCity
ratecity-newsletter

Money Health Newsletter

Subscribe for news, tips and expert opinions to help you make smarter financial decisions

By submitting this form, you agree to the RateCity Privacy Policy, Terms of Use and Disclaimer.

Advertisement

Learn more about home loans

Can I get a NAB first home loan?

The First Home Loan Deposit Scheme of NAB helps first home buyers purchase a property sooner by reducing the upfront costs required. This scheme is offered based on a Government-backed initiative, with10,000 available places announced in October 2020.

Suppose your application for the NAB first home buyer loan is successful. In that case, you’ll only need to pay a low deposit, between 5 and 20 per cent of the property value and won’t be asked to pay lender's mortgage insurance (LMI). You’ll also receive a limited guarantee from the Australian government to purchase the property.

If you’re applying for the NAB first home buyer home loan as an individual, you need to have earned less than $125,000 in the last financial year. Couples applying for the NAB first home loan need to have earned less than $200,000 to be eligible. To be considered a couple, you need to be married or in a de facto relationship. A parent and child, siblings or friends are not considered a couple when applying for a NAB first home loan.

The NAB First Home Loan Deposit Scheme is currently offered only to purchase a brand new property, rather than an established property.

Can first home buyers apply for an ING home loan?

First home buyers can apply for an ING home loan, but first, they need to select the most suitable home loan product and calculate the initial deposit on their home loan. 

First-time buyers can also use ING’s online tool to estimate the amount they can borrow. ING offers home loan applicants a free property report to look up property value estimates. 

First home loan applicants struggling to understand the terms used may consider looking up ING’s first home buyer guide. Once the home buyer is ready to apply for the loan, they can complete an online application or call ING at 1800 100 258 during regular business hours.

How much is the first home buyer's grant?

The first home buyer grant amount will vary depending on what state you’re in and the value of the property that you are purchasing. In general, they start around $10,000 but it is advisable to check your eligibility for the grant as well as how much you are entitled to with your state or territory’s revenue office.

How can I apply for a first home buyers loan with Commonwealth Bank?

Getting a home loan requires planning and research. If you are considering a home loan with the Commonwealth Bank, you can find the information you need in the buying your first home section of the bank’s website.

You can see the steps you should take before applying for the loan and use the calculators to work out how much you can borrow, what your monthly repayments would be and the upfront costs you’d likely pay.

You can also book a time with a Commonwealth first home loan specialist by calling 13 2221.

CommBank publishes a property report that may help you understand the real estate market. The bank has also created a CommBank Property App that you can use to search for property.  The link to download this app is available on the same webpage.

If you are eligible for the First Home Loan Deposit Scheme, CommBank will help you process your application. The scheme helps first home buyers to purchase a home with a low deposit. You can read details about this scheme here and speak with a CommBank home lending specialist to understand your options.

Where can I get all the information about an ANZ first home buyer’s loan?

As a first home buyer, you may require help and hand-holding, and as such ANZ has the buying your first home section on its website full of important information. ANZ also has a form in this section you can fill out to get a free consultation from an ANZ First Home Coach and create your own plan for buying your first home. This coach will help you understand where your current income is being spent and plan for your home loan repayments. You’ll get a clear picture of the costs involved in purchasing a property and how to budget or save for these costs. The coach will help you understand different deposit options and manage your accounts to enhance your savings.

There are three types of ANZ first home loans - Standard Variable, Fixed, and Equity Manager. The features, interest rates, and terms for each are different, and you can compare them here.

When they apply for an ANZ home loan, first home buyers can also get guidance on applying for the First Home Owner Grant (FHOG). This is a one-off government grant that may be available to you when you’re buying your first home. The eligibility criteria for FHOG differs between the different states and territories, which is why it’s helpful to have expert advice when applying.

How do I apply for Westpac’s first home buyer loan?

If you’re a first home buyer looking to apply for a home loan with Westpac, they offer an online home loan application. They suggest the application can be completed in about 20 minutes. Based on the information you provide, Westpac will advise you the amount you can borrow and the costs associated with any possible home loan. 

You can use Westpac’s online mortgage calculators to estimate your borrowing power. You can also work out the time it might take to save up for the deposit, and the size of your home loan repayments

When applying for a home loan with Westpac, you’re assigned a home finance manager who can address your concerns and provide information. The manager will also offer guidance on any government grants you may be eligible for. 

What does unconditional approval from Aussie Home Loans mean for first time home buyers?

As an Aussie home loan first time home buyer, your loan application passes through multiple stages. Early in the process, you’ll receive conditional approval, which means the lender approves your loan application as long as you meet certain conditions. Some of these criteria include selling another property or repaying existing debt.

The next stage is unconditional approval which is the final decision from the lender. After considering all the relevant information, the lender is willing to offer you a certain amount to buy a specific property.

Unconditional approval is also known as formal or full approval but receiving this doesn’t mean you need to accept the money. If you choose to proceed and accept the funds, you’ll sign the loan documents to finalise the loan and receive the money. You can, at this time, clarify any doubts you have with your Aussie broker.

You’re likely to get conditional approval, sometimes called pre-approval, when you want to get clear on your budget. You’ll then apply for unconditional or formal approval once you’ve found a property and made an offer. This process will involve the lender reviewing your finances and the details of the property you wish to purchase to make sure you can repay a loan on that property.

As a first time buyer, it may help you with the purchasing process to seek pre-approval or conditional approval. This may speed up the final purchasing process and help you through the home loan process in steps rather than all at once.

Do first-time home loan applicants qualify for tax benefits?

If you’re a first-time homebuyer applying for a home loan, you could qualify for some tax deductions, but only if your property is a source of income for you. For instance, if you rent out the property, you could get tax deductions on the cost of constructing or renovating it, the loss in value of depreciating assets such as furniture or electrical fixtures, and the home loan interest. 

Homeowners using their property as a residence could also get a tax deduction if a part or all of it is used for business. These deductions include tax write-offs for depreciating assets and deductions for operating expenses like utilities’ payments and service charges for phones and the internet. However, people running businesses from their residences don’t qualify for a tax deduction on the interest paid on their home loans.

What are the features of home loans for expats from Westpac?

If you’re an Australian citizen living and working abroad, you can borrow to buy a property in Australia. With a Westpac non-resident home loan, you can borrow up to 80 per cent of the property value to purchase a property whilst living overseas. The minimum loan amount for these loans is $25,000, with a maximum loan term of 30 years.

The interest rates and other fees for Westpac non-resident home loans are the same as regular home loans offered to borrowers living in Australia. You’ll have to submit proof of income, six-month bank statements, an employment letter, and your last two payslips. You may also be required to submit a copy of your passport and visa that shows you’re allowed to live and work abroad.

When does Commonwealth Bank charge an early exit fee?

When you take out a fixed interest home loan with the Commonwealth Bank, you’re able to lock the interest for a particular period. If the rates change during this period, your repayments remain unchanged. If you break the loan during the fixed interest period, you’ll have to pay the Commonwealth Bank home loan early exit fee and an administrative fee.

The Early Repayment Adjustment (ERA) and Administrative fees are applicable in the following instances:

  • If you switch your loan from fixed interest to variable rate
  • When you apply for a top-up home loan
  • If you repay over and above the annual threshold limit, which is $10,000 per year during the fixed interest period
  • When you prepay the entire outstanding loan balance before the end of the fixed interest duration.

The fee calculation depends on the interest rates, the amount you’ve repaid and the loan size. You can contact the lender to understand more about what you may have to pay. 

What do people do with a Macquarie Bank reverse?

There are a number of ways people use a Macquarie Bank reverse mortgage. Below are some reasons borrowers tend to release their home’s equity via a reverse mortgage:

  • To top up superannuation or pension income to pay for monthly bills;
  • To consolidate and repay high-interest debt like credit cards or personal loans;
  • To fund renovations, repairs or upgrades to their home
  • To help your children or grandkids through financial difficulties. 

While there are no limitations on how you can use a Macquarie reverse mortgage loan, a reverse mortgage is not right for all borrowers. Reverse mortgages compound the interest, which means you end up paying interest on your interest. They can also affect your entitlement to things like the pension It’s important to think carefully, read up and speak with your family before you apply for a reverse mortgage.

How much deposit do I need for a home loan from NAB?

The right deposit size to get a home loan with an Australian lender will depend on the lender’s eligibility criteria and the value of your property.

Generally, lenders look favourably on applicants who save up a 20 per cent deposit for their property This also means applicants do not have to pay Lenders Mortgage Insurance (LMI). However, you may still be able to obtain a mortgage with a 10 - 15 per cent deposit.  

Keep in mind that NAB is one of the participating lenders for the First Home Loan Deposit Scheme, which allows eligible borrowers to buy a property with as low as a 5 per cent deposit without paying the LMI. The Federal Government guarantees up to 15 per cent of the deposit to help first-timers to become homeowners.

How much deposit do I need for a home loan from ANZ?

Like other mortgage lenders, ANZ often prefers a home loan deposit of 20 per cent or more of the property value when you’re applying for a home loan. It may be possible to get a home loan with a smaller deposit of 10 per cent or even 5 per cent, but there are a few reasons to consider saving a larger deposit if possible:

  • A larger deposit tells a lender that you’re a great saver, which could help increase the chances of your home loan application getting approved.
  • The more money you pay as a deposit, the less you’ll have to borrow in your home loan. This could mean paying off your loan sooner, and being charged less total interest.
  • If your deposit is less than 20 per cent of the property value, you might incur additional costs, such as Lenders Mortgage Insurance (LMI).

What is a low-deposit home loan?

A low-deposit home loan is a mortgage where you need to borrow more than 80 per cent of the purchase price – in other words, your deposit is less than 20 per cent of the purchase price.

For example, if you want to buy a $500,000 property, you’ll need a low-deposit home loan if your deposit is less than $100,000 and therefore you need to borrow more than $400,000.

As a general rule, you’ll need to pay LMI (lender’s mortgage insurance) if you take out a low-deposit home loan. You can use this LMI calculator to estimate your LMI payment.