What is the First Home Owner Grant (FHOG)?

• The FHOG is a government initiative to help first home owners get their new first home sooner.
• It provides a one-time lump sum payment to eligible applicants, reducing the financial burden of buying a home.

What are the eligibility criteria for FHOG?

• Requirements for the applicant:
  • You (and any co-applicants) are at least 18 years old.
  • You are an Australian citizen or permanent resident (or applying with someone who is).
  • You should not have previously received a first home owner grant in any state or territory unless you subsequently repaid it.
• Requirements for the property and transaction:
  • The home must be a brand new, or established home that has undergone substantial renovations before you bought the house.
  • The home you are buying or constructing must be new and valued less than $750,000 (including land).
  • The home you are purchasing is a kit home or manufactured home that has been moved to a new site but has not been occupied after the move.
• First Home Owner Grant spouse requirements:
  • If you are not a PR, but your spouse is an Australian citizen—you may be eligible for the grant as a joint applicant if you meet the other eligibility requirements.
  • You or your spouse should not have previously received a first home owner grant in any state or territory of Australia. However, if you had received a grant that you later paid back, together with any penalty, you may be able to reapply.

Can I use FHOG as the Deposit?

• FHOG can help cover part of your deposit. However, many lenders still require you to have genuine savings or additional funds to complete the deposit requirements.
• It’s a good idea to check with your lender or broker to understand how much of the FHOG can be applied towards your deposit and any additional savings you may need.

5% deposit – First Home Buyer

• If you’re a first-home buyer in Australia, there are ways you can secure a home with a 5% deposit. You could:
  • Apply for any of the guarantees under the Home Guarantee Scheme
  • Use a shared-equity scheme
  • Apply with a lender that approves 95% Loan-to-Value Ratio (LVR) home loans
  • Use a guarantor

How Long and When Can I Get My FHOG?

• It typically takes about four weeks. However, this can vary depending on the completeness and accuracy of your application, as well as the specific state or territory processing it.
• FHOG is usually paid directly to your lender at the time of settlement. This means the grant amount is applied directly to your home loan, reducing the amount you need to borrow.
• If you’re building a home, the grant is typically paid to the builder with the first progress payment.
• It could also be paid directly to your account sometime after settlement if there was a delay in your land title registration or if additional documentation was required.

Can I Rent Out My First Home?

• Yes, you can rent out your first home after meeting the initial residency requirement.
• You must live in it as your principal place of residence for at least six months within the first year of purchase or completion.
• After meeting this requirement, you are generally free to rent it out without affecting your eligibility for the First Home Owner Grant (FHOG).

Tips to reduce mortgage

• Use An Offset Account:
  • An offset account helps you reduce the amount of interest you pay. The more money you have in your offset, the less interest you pay.
  • Since the home loan interest is calculated based on the balance of your loan, the money in your offset account helps reduce the loan balance.
• Make Timely Repayments:
  • Making repayments on your home loan also helps build equity. By making regular and timely repayments as they’re due, you’re slowly chipping away the balance of your mortgage, accumulating equity that you can use whenever required.
  • Making timely repayments also establishes positive credit behaviour.
• Make Extra Repayments:
  • If possible, you can even make extra or lump-sum repayments. If you have received a tax refund, a bonus or a commission, you can use this money to increase your repayment amount. By repaying more than the required amount, you’re paying off your home loan sooner.
  • Some lenders might charge a penalty for lump-sum or extra repayments. It’s best to check with your lender or mortgage broker before moving ahead.
• Switch To Fortnightly Repayments:
  • Use our home loan repayment calculator to compare savings by weekly, fortnightly, and monthly repayments.

Property purchasing costs

• Minimum of 5% deposit
• Stamp duty
• Property title transfer fee
• Registration fees
• Conveyancing fees
• Inspections including building/strata and pest
• Home loan set up fees
• Lenders Mortgage Insurance (LMI)

Property selling costs

• Agent Fees
• Marketing Costs
• Conveyancing Fees
• Capital Gains Tax (CGT)
• Presale Repairs and Renovations
• Styling/ Home Staging
• Auctioneer’s Fees
• Lender Fees
• Moving Costs