What are the benefits of the Home Guarantee Scheme?

Vaughan Fowler, a mortgage broker and franchise owner at Aussie Cronulla, has had plenty of customers make use of the First Home Guarantee in the last few years which, as he explains, has made buying a possibility for some even as prices in his area have risen.

"If someone is purchasing a unit for $850,000, then in order to avoid LMI they would normally need to have savings of 20% of the purchase price ($170,000), plus the stamp duty ($9000) and other costs ($3000).

"So, in total, they would need $182,000 in savings. Not many first home buyers have this level of savings, which is why they utilise either the First Home Guarantee Scheme or a guarantor to assist them.

"Using the Scheme they could purchase the property with savings of 5% ($42,500) plus stamp duty and costs of $12,000. So $54,500 in savings all up, which is a much more realistic position for young people."

Read more: The scheme that could make you a homeowner sooner

Get stories like this in our newsletters.