Who Qualifies?

Eligibility for the First Home Scheme depends on several factors. Here’s a quick overview:

Income and assets

• Income cap: As of 2025, gross family income must be below AUD $125,000 per annum for singles or AUD $200,000 for couples and families.
• Asset limits: Your total assets, including savings, investments, and other property (excluding the home you intend to buy), must not exceed AUD $450,000 for singles or AUD $600,000 for couples/families.

Citizenship and residency

• Australian citizens or permanent residents are eligible.
• Certain temporary visa holders may qualify if they meet specific criteria, but consult your lender or advisor.

Property criteria

• The home must be your primary residence.
• The property price must be within local price caps, which vary depending on the region.

Other considerations

• You need to demonstrate the ability to service the mortgage.
• You should not own any other property at the time of application.

Important: Always check the specific eligibility criteria for your state or territory, as rules can vary.

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Navigating the Buying Process with the Scheme

Here's a simplified step-by-step guide to purchasing your first home under this scheme:

1. Prepare Your Documentation

You'll need:

• Proof of identity (passport, driver’s license)
• Income details (pay slips, tax returns)
• Asset and liability statement
• Evidence of legal residence (citizenship or visa documentation)
• Evidence of savings for your deposit

2. Meet with a Lender or Mortgage Broker

Not all lenders participate in the scheme. Consult with a broker experienced in government schemes. They can help you:

• Understand loan options
• Calculate your borrowing capacity
• Clarify how much deposit you need

3. Obtain Pre-Approval

Getting pre-approval gives you a clear idea of your budget. This involves submitting your documents and having your financial position assessed.

4. Find a Suitable Property

Work with real estate agents or online platforms to find homes within your price range and location preferences. Remember to check regional price caps.

5. Make an Offer and Sign Contracts

Once your offer is accepted, review the contract carefully. At this stage:

• Confirm the property's eligibility
• Clarify the amount the government will contribute
• Understand your ongoing commitments

6. Complete the Settlement

Your lender will coordinate settlement, which involves:

• Finalizing your mortgage
• Registering the shared equity arrangement
• Paying Stamp Duty (though some schemes provide concessions)

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Understanding Your Mortgage and Financial Commitments

Fixed vs. variable interest rates

In Australia, home loans typically come with:

• Fixed rates: Payments stay the same for a set period, giving predictability.
• Variable rates: Payments fluctuate with the RBA cash rate, which can lead to savings or higher costs.

Choosing the right option depends on your risk appetite and financial stability.

Mortgage repayment timeline

Most Australian mortgages are over 25-30 years, but shorter terms are available. Remember, the sooner you pay off your loan, the less interest you'll pay overall.

Additional costs to budget for

• Legal fees
• Lender's mortgage insurance (LMI): Usually waived in schemes but double-check.
• Stamp Duty
• Property inspection and valuation
• Ongoing costs: Council rates, utilities, maintenance

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Overcoming Common Challenges

How do I use overseas savings?

Many international buyers wonder if they can use savings held abroad. Generally, Australian lenders accept funds transferred from overseas accounts if you can verify their source. You might need to provide bank statements and proof of legitimate source, such as employment earnings or inheritance.

What about lenders’ view of foreign income?

If you're earning income outside Australia, you'll need to show proof of steady income and possibly have it converted into AUD. Lenders assess the stability and reliability of your income, so maintaining consistent employment helps.

Do I need to pay for mortgage insurance?

In Australia, Lender’s Mortgage Insurance (LMI) protects the lender if you default, usually required when your deposit is less than 20%. However, under the First Home Scheme, part of the government’s contribution reduces the need for LMI, but confirm with your lender.

Understanding shared equity: Risks and rewards

Shared equity allows you to buy a home with a smaller deposit. But remember, you share ownership with the government. If property values increase, your equity grows, but so does your repayment obligation. Conversely, if property values fall, your share may decrease.

Quote: "Shared equity schemes are an excellent stepping stone on the property ladder, especially for first-timers who need a little assistance to get started." — Jane Smith, Mortgage Expert

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Tips for International Buyers and New Australians

• Be aware of FIRB rules: The Foreign Investment Review Board oversees foreign investment in Australian property. Many foreign buyers need approval before purchasing.
• Verify visa status: Only certain visa types qualify for the scheme.
• Understand currency implications: Convert your savings accurately and consider exchange rate fluctuations.
• Seek expert advice: A mortgage broker experienced in international clients can navigate the complexities.
• Build your credit history: Australian lenders assess creditworthiness differently. Establishing good financial habits helps.

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Final Thoughts

The First Home Scheme has transformed housing affordability for thousands of Australians, including newcomers and migrants. It opens doors that previously seemed closed, helping many achieve their dreams of owning a home.

If you're contemplating your first purchase, start early. Gather your documents, understand your financial position, and consult professionals who can guide you through the process. With the right preparation and knowledge, homeownership in Australia is within your reach.

Remember, your journey may have unique challenges, but with persistence and the right support, you'll turn your Australian property dreams into reality.