First Home Owner Grant and your home loan deposit
If you're eligible, the First Home Owner Grant (FHOG) can be a fantastic bonus when it comes to budgeting for the purchase of your first home. But it’s important to correctly factor the FHOG into your calculations.
The FHOG can be counted as a contribution to the value of your home purchase and so it can be included in calculations of your Loan to Value Ratio (LVR). This means that you may be able to avoid paying Lenders Mortgage Insurance if the FHOG and your genuine savings total at least 20% of your property's value.
However, if you are looking to get the First Home Owner Grant to build a new home on a block of land, you must keep in mind that the grant will not be paid until construction stage, and so you mustn’t factor it into the land purchase.
Your mortgage broker will work with you to assess if you are eligible for the First Home Owner Grant, as regulations and grant value vary from state to state. They will also help you work through your planning if you are looking to buy and build to make sure you’ve correctly budgeted for all aspects of your home purchase.
You can take our First Home Owner Grant Eligibility Questionnaire to see if you might be eligible.