More first home buyers have a chance at owning their own home with as little as a 5% deposit now the Federal Government has released an additional 10,000 loan guarantees in the First Home Loan Deposit Scheme.

While the loan guarantees herald a chance for more people to break into the housing market, social housing advocates call for the government to do more for renters and home builders.

The First Home Loan Deposit Scheme has already been operating for a year and Federal Member for Page Kevin Hogan said the new loan guarantee additions would “cut years off the time it takes for Australians to save for a deposit”.

The scheme allows borrowers to pay a 5% deposit, and the Government acts as a guarantor for the remaining 15%.

This means buyers can avoid expensive lenders' mortgage insurance, which can cost thousands of dollars.

“We are doing all we can to help Australians to get into a home of their own sooner,” Mr Hogan said.

“This can also be used in conjunction with the First Home Super Saver Scheme and HomeBuilder, and first home buyers may also be eligible for state grants and concessions.”

“The Scheme has proven popular with first home buyers under 30 years of age who secured 59% of guarantees.”

What about renters and builders?

North Coast Community Housing chief executive John McKenna said in order to make a real difference, more needs to be done to help people building their own home, as well as help people renting.

“Home ownership in the 35-44 year old cohort has dropped and more people are now renting and can’t get a start,” he said.

“There should actually be a home builders grant.

“We’ve been advocating this based on a new report showing the residential construction industry is the second largest economic multiplier of all 140 industries that make up our economy.

“More people are now also in housing stress. The recent Covid disruption highlighted that renting is a vulnerable situation when people lose their jobs and can’t pay the rent.

“We also need more social affordable housing built and managed by the community, so people can have secure accommodation.”

Mr McKenna also said renters need more security in the private market.

“We still have a no cause eviction clause which means owners can evict people only giving them 90 days notice. 

“Our sector is calling for changes to the Residential Tenancy Act for longer term leases too.”

How to apply for the First Home Loan Deposit Scheme

The First Home Loan Deposit Scheme is run by the National Housing Financial Investment Corporation (NHFIC). The Commonwealth Bank, National Australia Bank and 25 smaller lenders are part of the scheme.

For more information and eligibility criteria, visit NHFIC’s First Home Loan Deposit Scheme website: https://www.nhfic.gov.au/what-we-do/fhlds/