First Home Buyer Advantage Plus

With high property prices it can be overwhelming for first home buyers to save for a deposit. However, there is a way to make this more achievable with the assistance of those closest to you.

• The Parental Guarantee enables your parents to act as guarantors for up to 20% of the purchase price by leveraging the equity in their home. Importantly, the guarantee is limited to the amount to cover the gap between the deposit and 20% of the purchase price. It is NOT a guarantee for the whole purchase price.
• This arrangement grants you the greater borrowing power and reduces your Loan to Value Ratio (LVR) to 80%.
• As a result, you could potentially save thousands of dollars in Lenders Mortgage Insurance costs, and by opting to be the guarantors, we can limit your parents’ liability to an amount that they are comfortable with.

Scenario:
Laura is a first home buyer and has found a property that she wishes to buy for $700,000. She can afford to make repayments on a loan of $700,000 but doesn’t have enough funds for the 20% deposit. Laura’s parents are happy to assist her in entering the property market and have enough equity to lend against their current property. Laura’s parents offer 15% equity of the $700,000 purchase price from their own property, which when added to her 5% deposit, enables the purchase to proceed without the need for Lenders Mortgage Insurance. This may result in a huge saving for Laura as Lenders Mortgage Insurance can be an expensive extra.
In this scenario, $105,000 has been secured against her parent’s property, and the property being purchased. There are two loans in Laura’s name.
*Stamp duty costs may apply and vary depending upon the state the property is in.

• Loan 1 for $560,000 secured by the property being purchased.
• Loan 2 for $105,000 secured by the parent’s property and the property being purchased.

Useful Links

• Downloadable Application Form
• Target Market Determination (TMD)
• Request a Home Loans Key Facts Sheet
• Free Home Valuation Service: Get your RP Property Data Report 
• Learn more about the benefits of our home loans
• Read our guide for first home buyers