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Purchasing a home on your own can feel like a long and daunting journey. And it can be even more daunting if you have a child or children to look after. Daycare, new school uniforms and unexpected orthodontic treatments can really throw a spanner in your (saving) works – especially if you’re renting or not working full-time hours.

But, it’s not all doom and gloom! Thanks to the federal government, Housing Australia’s Family Home Guarantee (FHG) could be the answer to your homebuying dreams, even if you’ve owned a property previously.

The Family Home Guarantee

So, what is the Family Home Guarantee – or the FHG? Well, the FHG is an initiative that supports eligible single parents and legal guardians to buy a property with just a 2% deposit and avoid paying Lender’s Mortgage Insurance (LMI).

To be eligible, you will need to meet the following requirements:

  • You must apply as an individual.
  • You must be a single parent or single legal guardian. (Note: A person who is separated but not divorced is not considered single.)
  • You must have at least one dependent child (as defined by the Social Security Act 1991.)
  • You must be an Australian citizen or eligible permanent resident.
  • You must be at least 18 years of age.
  • You must be earning no more than $125,000 per year.
  • You must intend to be the owner-occupier of the purchased property.
  • You must not currently own property or land.

If you have previously owned a property in Australia, you may still be eligible for the FHG.

How the FHG can help

The key advantage for buyers, is that the FHG lowers the deposit amount you need to purchase a property. To avoid paying thousands of dollars in LMI, home buyers usually need to have a 20% deposit available, but through the FHG you could only need a minimum of 2%.

Purchasing a $600,000 home in Perth
20% deposit 2% deposit
$120,000 $12,000

That’s a significant difference, and a much less intimidating goal for many people who are on their own and raising a child (or children). Plus, there’s no LMI payment on top!

How to learn more

The FHG is only available through a limited number of lenders, but luckily, you’re already in the right place as P&N Bank is one of those lenders. We have more information about the Home Guarantee Scheme (HGS) and its three different Guarantees (First Home Guarantee, Regional First Home Buyer Guarantee and Family Home guarantee) available here. You can also visit the Housing Australia website to learn more and see the detailed list of eligibility criteria and property price cap information.

As we’re one of the selected lenders for the HGS, our team of home lending specialists can also answer any questions you may have about purchasing a property as a single parent. You can submit an enquiry by using this form, or call us on 13 25 77.

Tips to help you save 2% deposit

If you’re keen to take advantage of the FHG, then you’ll need to get serious about your deposit and getting your finances in order. Just like with other types of lending, your income and outgoings will all be assessed as part of the home loan process, so if you have a strong budget in place you’ll likely be well on your way to success.

Creating a budget can sound like hard work, but we can assure you it’s not. In fact, we have explained how to create a budget in five easy steps in another of our articles to help you get started. Whether budgeting in buckets or the 50/30/20 budget is your thing, we’ve got you covered – and don’t forget about our budgeting app, mymo by P&N Bank.  

Once your budget is set, it’s time to reach your savings goal so make sure you have an account that’s working for you. A great interest rate is key, but you may also want to choose a savings account that offers a bonus rate (when you meet certain criteria each month) to help grow your balance. A term deposit may also be a useful type of account to stash some of your home deposit in. By locking it away for a set amount of time, you won’t be tempted to spend it and you’ll generally earn a higher rate of interest than if you kept your money in a regular savings account.

To apply for the Family Home Guarantee, make an appointment to speak with a Home Lending Specialist who can help guide you through the process.

Banking and Credit products issued by Police & Nurses Limited (P&N Bank) ABN 69 087 651 876 AFSL/Australian Credit Licence 240701. Any advice does not take into account your objectives, financial situation or needs. Read the relevant Product Terms and Condition, before acquiring any product in considering and deciding whether it is right for you. The Target Market Determinations (TMDs) are available . on our website or upon request.