Expanded Home-Buying Opportunities for Australians: The 5% Deposit Scheme

November 29, 2023

Australians looking to purchase their first home are in for a welcome update. The range of lenders participating in the 5% deposit initiative has significantly widened, paving the way for easier entry into the housing market.


This expansion is particularly beneficial for those accessing the Home Guarantee Scheme (HGS), which now includes more lenders, as recently announced by Westpac and its affiliates.


Westpac Brands Join the Home Guarantee Scheme

The addition of St.George, Bank of Melbourne, and BankSA, as detailed in Westpac's media release, enhances the choices for first home buyers under the HGS. This scheme, crucial for buyers with limited deposits, allows the purchase of a home with a minimal 5% deposit, facilitated through the First Home Guarantee or Regional First Home Buyer Guarantee.


Family Home Guarantee: A Boost for Solo Parents

The scheme also includes the Family Home Guarantee, which is a boon for solo parents, enabling them to secure a home with just a 2% deposit.


Increased Lender Participation Fuels Competitive Rates

The HGS now features 33 lenders, as listed on Housing Australia's participating lenders page. This diverse group increases competition, potentially leading to more favorable home loan rates for first-time buyers.


The Benefits of a Smaller Deposit

One of the main obstacles for first home buyers is saving for a large deposit. The HGS eases this burden, allowing entry into the market much sooner. This scheme has proven effective, with Housing Australia's data showing that in the last financial year, one in three first home buyers benefited from it.

Additionally, recent reports highlight that participants have gained an average home equity of $82,000, a significant achievement considering the modest average deposit of $35,200 in 2020, and $36,400 by mid-2023, compared to the broader market average of $159,000.


Selecting the Right Loan: Expert Guidance

Navigating through the more than 40 lenders offering these low-deposit home loans can be challenging. Our team is here to assist, helping you determine your eligibility for the scheme and guiding you through the loan selection process. For more details about our approach and the success stories, refer to Housing Australia's 2022-23 Annual Report.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Updates

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