What is the Home Guarantee Scheme?

So the First Home Guarantee is a government initiative that allows individuals to be able to purchase a home with just a 5% deposit.

When this scheme was originally introduced, it only allowed citizens to be able to buy and you had to either be an individual or in a de facto relationship or married.

Now, what the first Home Guarantee allows is individuals, siblings, friends, all more than two people to come in together and purchase a property with just a 5% deposit.

Now, why the 5% deposit part is important is in previous years, if you had less than a 20% deposit, you would have to pay something called lenders mortgage insurance when purchasing your first home, which is an insurance that protects the bank because these types of loans were considered risky.

You were able to avoid this insurance if you had a parent or a sibling come in as a family guarantor and allow you to purchase a property, meaning that the property would be used to guarantee the mortgage. Instead, now the federal government comes in to make the home loan less risky and allows the borrowers to get  into the market sooner.

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