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Despite the rising rate environment and declines in dwelling values over the past year, the equity position of first-home buyers under the Home Guarantee Scheme (HGS) has improved.

A joint study by the National Housing Finance and Investment Corporation (NHFIC) and CommBank found that first-home buyers appear to be growing their equity position — the average equity gain of each HGS guarantee estimated to be around $82,000 since 2020.

NHFIC head of research Hugh Hartigan said the deposits of home buyers under the HGS remain unchanged while deposits paid by the broader first-home buyer market have increased by almost 50% since 2020.

“Despite the challenging interest rate environment and dwelling price falls last year, it is encouraging that the average equity position of Home Guarantee Scheme participants appears to be holding up,” he said.

“It is also interesting that deposits for first-home buyers outside of the HGS have risen so strongly, which may indicate they have other ways of supplementing their savings.”

Here are the other key insights of the study:

  • HGS maintains its assistance to individuals with modest incomes, as indicated by the average annual household income of HGS participants, which stands at $108,000, in contrast to the broader first home buyer market's average of $117,000.
  • The average deposit payments made by first-home buyers in the HGS have seen a slight increase from $35,200 to $36,400 since 2020.
  • On the other hand, the broader first home buyer market experienced a nearly 50% rise in average deposits, escalating from $108,400 to $159,000. This could suggest that first-home buyer savings are potentially being supplemented by additional sources.
  • HGS participants typically opted for smaller loans in relation to their income, contrasting with the broader first-home buyer market. The average loan amount within the HGS has seen a 4.7% uptick since 2020, whereas the average loan amount for the broader market increased by 13.4%.
  • HGS continues to offer more substantial support to women as a portion of single borrowers, surpassing the broader first-home buyer market (54% under HGS compared to 47%). This is especially notable for single women with dependents under the Family Home Guarantee, where the percentage stands at 80%.
  • Price declines within the HGS segment, particularly in the lower end of the market (between the 20th and 30th percentiles), were relatively minor, ranging from 1% to 2%. This stands in contrast to the broader housing market, which experienced more significant falls of 5% to 8%

In June, the NHFIC released a set of data showing that the scheme has already helped 100,000 Australians purchase or build a new home.

According to NHFIC, around a fifth of all those who qualified and used the scheme were key workers, including 6,700 teachers, 5,000 nurses, and almost 3,500 social workers.

Furthermore, around 34,000 guarantees were provided to regional Australians.

Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.

Update resultsUpdate
LenderHome LoanInterest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees LVR Lump Sum Repayment Additional Repayments Split Loan Option TagsFeaturesLinkCompare
6.04% p.a.
6.06% p.a.
$2,408
Principal & Interest
Variable
$0
$530
70%
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  • $2000 for loans up to $700,000
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5.95% p.a.
5.95% p.a.
$2,385
Principal & Interest
Variable
$0
$0
90%
5.99% p.a.
5.90% p.a.
$2,396
Principal & Interest
Variable
$0
$0
80%
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
Important Information and Comparison Rate Warning

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of .

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Photo by Jae Young Ju on Canva.