Regional Home Guarantee: What does it offer home buyers?

Couple carrying boxes into new home.

The federal government is set to give home buyers in rural and regional Australia a leg up with its introduction of its Regional Home Guarantee.

Announced as part of the 2022-23 federal budget, the program will help Australians buy or build a new home in regional areas. The government also hopes it will incentivise more migrants to settle in regional areas.

The move was welcomed by Housing Industry Association (HIA) managing director Graham Wolfe, who said it would put home ownership within reach for many Australians while also giving construction across the country a shot in the arm.

“Many people have chosen to move to regional areas over the last two years to build a new life, placing pressure on housing affordability in these areas,” he said.

“Supporting home building at the same time as supporting people re-enter the housing market can make a real difference.”

What is the Regional Home Guarantee?

The Regional Home Guarantee will give applicants the chance to purchase or build a new home in rural or regional areas with a deposit of as little as 5%.

The government will make 10,000 places available to first home buyers, those who have not owned a property in the last five years, and permanent residents.

How can it help?

Typically, home buyers are required to put up a deposit worth 20% of a property’s value. Without a sufficient amount, borrowers are usually required to purchase Lender’s Mortgage Insurance  (LMI), which can cost thousands of dollars.

Letting borrowers purchase a home without the usual 20% deposit eliminates one of the biggest hurdles that many Australians currently face when attempting to buy a home, and also spares them from having to take out LMI.

Is there any other support for home buyers?

Along with the new programs set to be announced in this year’s federal budget, there are a number of existing grants and initiatives for home buyers. They include:

First Home Owner Grant

The First Home Owner Grant offers a one-off lump sum to first home buyers, which will vary in size depending on the state or territory you live in. This can be used to purchase a newly built or substantially renovated.

First Home Loan Deposit Scheme

Under the First Home Loan Deposit Scheme (FHLDS), eligible first home buyers can buy a home with a deposit of just 5%, with the government guaranteeing the remaining 15% of the purchase price.

This lets borrowers bypass the need for Lender’s Mortgage Insurance, which is usually required to offset the risk posed by low deposit borrowers.

First Home Super Saver Scheme

The First Home Super Saver scheme lets Aussies use their superannuation fund to fast-track their savings for a first home deposit.

You’ll be able to make additional super contributions of up to $15,000 each year by sacrificing a portion of your salary. Once you have contributed $50,000 via the scheme, you can withdraw it and put it towards a deposit.

Family Home Guarantee

Single parents with at least one dependent child can apply for the Family Home Guarantee, which lets you purchase a home with a deposit of as low as 2%. 

To be eligible, you must earn less than $125,000 per year. While the program is not available to current homeowners, you may still be eligible if you owned a property in the past.

For information on property and lending trends, head over to our home loan statistics page. And if you’re in the market for a home loan, visit our home loan comparison page, or browse the selection below.

Home loan comparisons on Mozo - last updated 13 August 2022

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* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

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