Home Guarantee Scheme

Could the Home Guarantee Scheme Help You?

Separation changes everything, including your path to property ownership. If you are coming out of a marriage or de facto relationship and looking to buy a home on your own, the Home Guarantee Scheme could be one of the most important tools available to you. At Divorce Home Loans, we work specifically with people in your situation, and we know how powerful government support can be when you are starting over with a reduced deposit and a single income.

What Is the Home Guarantee Scheme?

The Home Guarantee Scheme (HGS) is a government-backed initiative that allows eligible buyers to purchase a property with a smaller deposit, without paying Lenders Mortgage Insurance (LMI). LMI is a cost that lenders typically charge when a borrower has less than a 20% deposit. It can add tens of thousands of dollars to the cost of buying a home. The HGS removes that cost by having the government act as a guarantor for part of your loan, which means you keep more of your money and get into a property sooner.

There are several streams within the scheme, each designed for different types of buyers. The First Home Guarantee allows eligible first home buyers to purchase with as little as a 5% deposit only. The Family Home Guarantee (FHG) is specifically designed for single parents and single legal guardians, and it allows eligible applicants to buy with a deposit of as little as 2%. The Regional First Home Buyer Guarantee supports eligible buyers purchasing in regional areas, also with a 5% deposit. Each stream has its own HGS eligibility criteria, income limits, and property price caps, so understanding which one applies to your circumstances is essential.

Why This Matters After Divorce

When a relationship ends, assets are divided. That often means the deposit you had saved as a couple is now split, reduced, or tied up in settlement negotiations. Many people going through divorce find themselves in a position where they are technically buying your first home again as a sole applicant, even if they have owned property before. Depending on your circumstances, you may qualify for one of the HGS streams, which can make the difference between being able to buy now or waiting years to save a larger deposit.

The Family Home Guarantee is particularly relevant for single parents coming out of a divorce. If you have dependants and are the primary carer, this stream was designed with your situation in mind. The loan to value ratio (LVR) requirements are more accessible than standard lending, and the LMI waiver means you are not penalised for having a smaller deposit.

HGS Eligibility and What to Know

HGS eligibility is assessed against a number of factors. These include your income, your citizenship or residency status, whether you have previously owned property, and the type of property you intend to purchase. Income limits apply to each stream, and these are assessed on an individual basis for sole applicants. Property price caps also apply and vary depending on the location of the property you are buying, including specific thresholds for HGS regional property purchases.

The scheme is available through HGS participating lenders and HGS approved lenders only. Not every bank or lender in Australia participates, which is why working with a broker who can access home loan options from banks and lenders across Australia is so valuable. At Divorce Home Loans, we know which lenders are participating in the scheme at any given time, and we can match your situation to the right lender and the right stream.

When it comes to your loan structure, you can choose between a variable interest rate and a fixed interest rate under the scheme. Both options are available depending on the lender and the product. Your broker can walk you through the implications of each based on your financial position and goals.

HGS Benefits and the No LMI Advantage

The most significant of the HGS benefits is the no LMI outcome. When you compare HGS vs LMI, the savings can be substantial. LMI premiums are calculated as a percentage of the loan amount and can easily reach $15,000 to $30,000 or more depending on the purchase price and deposit size. Avoiding this cost through the scheme means more of your money stays in your pocket, which matters enormously when you are rebuilding financially after a separation.

Beyond the LMI waiver, the scheme also supports affordable entry into the property market at a time when prices in many areas remain high. Whether you are looking at an HGS new home or an HGS existing home, the scheme applies to both, giving you flexibility in your property search.

It is also worth noting that the HGS does not affect stamp duty obligations. Stamp duty is a separate state or territory government charge and is not waived under the scheme. However, you may be eligible for first home buyer stamp duty concessions depending on your state and circumstances, which is something your broker can help clarify as context.

HGS Places Available and Timing

HGS places available are limited each financial year and are allocated on a first-come, first-served basis. Once places in a particular stream are filled, no further applications are accepted until the next financial year. This makes timing a critical factor. If you are considering the scheme, getting your HGS application moving as early as possible in the financial year gives you the best chance of securing a place.

At Divorce Home Loans, we help you understand your HGS eligibility, identify the right stream for your situation, and connect you with low deposit loans that align with the scheme requirements. We also work alongside your legal and financial advisers as needed, though our specific role is in the mortgage broking space. If you want to understand how the scheme fits alongside other options such as no LMI loans or a guarantor loan, we can walk you through the differences so you can make an informed decision about your path forward.

The Simple Steps

1. Understanding Your Needs
Your mortgage journey starts with a thorough one-on-one consultation with your Finance & Mortgage Broker. During this meeting, your broker will take the time to understand your property aspirations, whether you are purchasing your first home, growing an investment portfolio, or exploring commercial lending opportunities. By reviewing your financial circumstances, including your income, savings, existing debts, and credit history, your broker will provide personalised recommendations suited to your specific situation.

2. Financial Positioning
To accurately assess your borrowing capacity, your broker will ask you to provide key financial documents, including recent bank statements, tax returns, and a summary of your assets and liabilities. Using this information, they will calculate a realistic borrowing range while factoring in elements such as LVR, potential LMI costs, and current interest rates. If there are areas for improvement in your financial profile, your broker will offer practical guidance to strengthen your application before moving forward.

3. Comparing Loan Options
With a clear picture of your finances, your broker will research and compare loan products from a wide network of lenders across Australia. They will walk you through the differences between fixed and variable interest rate loans, highlight the advantages of features like offset accounts, and identify opportunities for interest rate discounts. All relevant fees, loan conditions, and potential future changes to rates or LVR will be clearly explained so you can make a well-informed decision.

4. Pre-Approval Process
Securing pre-approval is an important milestone in your property search. It gives you a confirmed borrowing limit, allowing you to shop for property with confidence and present yourself as a serious buyer in a competitive market. Your broker will manage the documentation requirements and liaise with the lender on your behalf to make the pre-approval process as smooth and efficient as possible.

5. Submitting the Loan Application
With pre-approval secured, your broker will assist you in preparing and lodging your formal loan application. They will ensure all required documents are accurate and complete, covering everything from proof of income and bank statements to details of any outstanding liabilities. Throughout this stage, your broker will maintain direct communication with the lender to keep the process moving and minimise any potential delays.

6. Loan Approval & Settlement
Once your loan receives formal approval, your broker will sit down with you to review the loan offer in detail, making sure you are fully comfortable with the terms and conditions. They will assist with arranging relevant insurance, such as mortgage protection cover, and provide clear guidance through each step of the settlement process. Your broker will remain on hand to address any last-minute questions or concerns as you approach the finish line.

7. Finalising Ownership
Settlement day marks the moment your loan is officially activated and ownership of the property transfers to you. Your broker will work closely with the lender and your conveyancer to ensure a seamless and timely settlement. Once the process is complete, you will be the proud owner of your new property, and your Finance & Mortgage Broker will continue to support you with ongoing advice to help you manage your loan effectively and meet your repayment goals.

Common Questions

What to consider when applying for a loan after divorce?

Applying for a home loan after a divorce is a different experience to applying as a couple, and there are a number of important factors worth thinking through before you begin.

First, your borrowing capacity will likely look different now that you are applying on a single income. Lenders will assess your ability to service a loan based on your individual earnings, expenses, and any existing debts. If you are receiving child support or spousal maintenance, some lenders may include a portion of those payments as income, but policies vary significantly from one lender to the next.

Your property settlement also plays a key role. Most lenders will want to see a finalised property settlement or binding financial agreement before they will approve a loan, because this determines how your assets and liabilities have been divided. Without this in place, it can be difficult for a lender to get a clear picture of your financial position.

It is also worth reviewing your credit history before you apply. Joint debts, missed payments on shared accounts, or increased personal debt during the separation period can all affect your credit file. Being aware of where you stand gives you the chance to address any issues early or to explore lenders who take a more flexible approach to credit assessment.

You will need to have your documentation in order as well. This typically includes proof of identity, income verification such as payslips or tax returns, bank statements, details of any liabilities, and copies of your settlement documents. If child support or maintenance forms part of your income, you may also need to provide a court order or Child Support Agency assessment.

Finally, consider the type of loan that suits your circumstances. Whether you are refinancing the family home into your name, purchasing a new property, or looking at low deposit options after a settlement, the right loan structure can make a real difference to your repayments and long-term financial position.

Every situation is unique, and the lending landscape can feel overwhelming when you are navigating it on your own for the first time. At Divorce Home Loans, we work exclusively with people going through separation, so we already understand the challenges you are facing. We can help you understand your options, prepare a strong application, and find a loan that fits your new chapter.

Why should I use a mortgage broker who specialises in divorce rather than going directly to a bank?

Going through a divorce adds a layer of complexity to the home loan process that a standard bank branch may not be well equipped to handle. A mortgage broker who specialises in working with people going through a divorce understands the unique challenges involved, including how lenders assess income from maintenance payments, how property settlements affect borrowing capacity, and how to present an application in a way that reflects your true financial position. Rather than being limited to the products of a single institution, a specialist mortgage broker has access to a panel of lenders and can help identify options that suit your specific situation. Divorce Home Loans exists specifically to support people in your position, offering guidance that is tailored to the realities of life after separation, without the added pressure of dealing with a lender directly.

Can I refinance the family home into my own name after a separation?

Refinancing the family home into your sole name is one of the most common financial steps taken during a divorce or separation. This process involves applying for a new home loan in your name only, which would be used to pay out the existing joint mortgage and, in many cases, buy out your former partner's share of the property. Whether this is possible will depend on a number of factors, including your income, your credit history, your current debts, and the value of the property. It is important to seek professional advice before making any decisions, as the process can be more involved than a standard refinance. Divorce Home Loans can help you understand what may be available to you based on your personal situation.

What happens to our joint mortgage during a divorce?

When a couple separates, the joint mortgage does not automatically change. Both parties remain legally responsible for the loan until it is formally refinanced, paid out, or the property is sold. This means that if one person stops making repayments, the other person's credit file can be affected. It is important to keep up with repayments during the separation period and to seek financial and legal advice as soon as possible. A mortgage broker who understands the complexities of divorce can help you explore your options, whether that means refinancing into one name, selling the property and dividing the proceeds, or another arrangement that suits both parties. Divorce Home Loans works with clients in exactly these situations every day.

What documents will I need to apply for a home loan after a divorce?

When applying for a home loan after a separation or divorce, you will generally need to provide a range of documents to support your application. These typically include proof of identity, recent payslips or tax returns to verify your income, bank statements, details of any existing debts or liabilities, and a copy of your property settlement or binding financial agreement. If you are receiving child support or spousal maintenance, you may also need to provide documentation such as a court order or Child Support Agency assessment. The exact requirements will depend on the lender and your individual circumstances. Divorce Home Loans can help you understand what is needed and assist you in gathering and organising your documents before submitting an application.

How long does the process of refinancing after a divorce usually take?

The time it takes to refinance a home loan after a divorce can vary depending on a number of factors, including how quickly your property settlement is finalised, how prepared you are with your documentation, and how long the lender takes to assess and approve your application. In general, once all the necessary documents are in order and a formal settlement is in place, the refinancing process can take anywhere from a few weeks to a couple of months. Delays can occur if additional information is requested by the lender or if there are complications with the settlement. Divorce Home Loans will work with you to help keep the process moving as efficiently as possible and keep you informed at every stage.

Can I get a home loan if I am receiving spousal maintenance or child support payments?

Income from spousal maintenance or child support can sometimes be considered by lenders when assessing a home loan application, but the way each lender treats this type of income varies significantly. Some lenders may accept these payments as part of your income, while others may only consider a portion of it, or may require evidence that the payments are likely to continue for a set period of time. Documentation such as a court order or binding financial agreement is usually required. Because every lender has different policies, it is important to work with a mortgage broker who understands how these income types are assessed. Divorce Home Loans has experience working with clients in these circumstances and can help you understand how your income may be viewed by lenders.

What if my credit history has been affected by the separation?

It is not uncommon for a person's credit history to be impacted during or after a separation. Missed payments on joint accounts, defaults, or increased debt levels can all leave a mark on your credit file. While a poor credit history can make it more challenging to obtain a home loan, it does not necessarily mean that borrowing is out of the question. Some lenders are more flexible in how they assess credit history, particularly when there are clear and documented reasons for any issues. It is important to be upfront about your situation and to seek advice from a mortgage broker who understands the lending landscape for people in your circumstances. Divorce Home Loans can help you understand your options and work with you to put your best application forward.

Do I need a formal property settlement before I can apply for a new home loan?

In most cases, lenders will want to see a formal property settlement or at least a binding financial agreement before they will consider a loan application related to a divorce. This is because the settlement determines how assets and liabilities are divided, which directly affects your financial position and borrowing capacity. Without a formal agreement in place, it can be difficult for a lender to assess your situation accurately. We strongly recommend working with a family law solicitor to get your property settlement formalised before applying for finance. Once that is in place, Divorce Home Loans can help you understand what lending options may be available to you and assist you in preparing a strong application.

Is it possible to buy a new home while the divorce is still in progress?

Purchasing a new property while a divorce is still in progress is possible in some circumstances, but it can be complicated. Lenders will want to understand your full financial position, including any outstanding joint debts and liabilities, before they will consider an application. If your property settlement has not yet been finalised, there may be uncertainty around your assets and liabilities that makes it difficult for a lender to assess your situation. In some cases, people choose to wait until the settlement is complete before purchasing a new property, while others may be in a position to proceed sooner. Every situation is different, and it is important to get professional advice before making any decisions. Divorce Home Loans can help you understand where you stand and what may be possible given your circumstances.

What is Divorce Home Loans and how can they help me?

Divorce Home Loans is an Australian finance and mortgage broking company that works specifically with people who are going through a separation or divorce. We understand that the financial side of a relationship breakdown can feel overwhelming, and that the decisions you make during this time can have a lasting impact on your future. Our role is to help you understand your borrowing options, whether you are looking to buy out your former partner's share of the family home, refinance an existing mortgage into your own name, or secure a new property after settlement. We work with a wide range of lenders to find options that suit your individual circumstances, and we guide you through the process from start to finish.

Government-backed support to help you buy again after separation