Similar to the other sections of the Government’s Home Guarantee Scheme (First Home Guarantee, Family Home Guarantee and the previous New Home Guarantee), the Regional Home Guarantee will allow you to purchase a new home with a lower deposit.
With the Regional Home Guarantee you are able to purchase a home with a deposit as low as 5% and avoid paying lenders’ mortgage insurance (LMI). In most cases LMI is applicable when borrowing more than 80% of a property’s value and is an insurance that is used to protect the lender. Due to being a part of the First Home Guarantee scheme offered by the Government, eligible applicants for the Regional Home Guarantee can avoid paying LMI as the Government serves as a guarantor on your loan, meaning there is no need for the bank to take out this insurance.
It is important to note that the Regional Home Guarantee does differ from the other components of the New Home Guarantee and the Family Home Guarantee as it is only available to eligible participants who have not owned a home for at least 5 years and are looking to purchase a new home in a regional location.