The government has launched a new guarantee scheme in the budget, which is specifically geared towards regional buyers.
Under the Regional Home Guarantee, borrowers in regional areas (including those who aren’t first home buyers) will be able to buy or build a new home with a deposit as small as 5 per cent, while the government guarantees 15 per cent of the property purchase price (not actually pays for).
The scheme applies to Australian residents who have not owned a home in five years. It starts from 1st July 2022.
It is important to note that this just helps you cover the deposit. It does not improve your ability to repay. So for example if you have a $50,000 deposit you could buy a million dollar house. But only if you can afford to meet repayments on a $950,000 loan.
Here are a couple of tools to help you work out your ability to repay.
See what you think – Loan calculator
Then see what the bank is likely to think:
Property investors may want to consider whether this stimulus will act like other times the government has interfered in the market to help home buyers, by just pushing prices up. Maybe regional prices are about to rise.
