HOME BUYER GUARANTEE

First-home buyers using the federal government’s low-deposit scheme are borrowing less and achieving good returns, new analysis shows.

Buyers who purchased with the Home Buyer Guarantee Scheme, which helps buyers with a deposit as low as 5%, can expect steady equity growth, according to a new report by the National Housing Finance and Investment Corporation and the Commonwealth Bank.

The report shows the average borrower using the scheme also has seen their equity grow by $82,000 since 2020.

NHFIC head of research, Hugh Hartigan, says first-home buyers are still keen to buy despite the challenging interest rate environment.

“It is  encouraging that the (average) equity position of Home Guarantee Scheme participants appears to be holding up,” he says.

The average deposit paid by first home buyers using the scheme is $36,400, considerably lower than the rest of the first home buyer market, which is paying an average deposit of $159,000.

The average loan amount under the scheme has increased 4.7% since 2020.