Help Buying Your Home

First Start is an ideal way for your parents to help you with your dream of home ownership. 

It’s a way for a family member (such as your parents) to put money towards your deposit, which could help you get into your first home sooner.

This can reduce the amount you need to borrow and may help you avoid having to pay Lenders Mortgage Insurance. 

In return, your parents (or other contributor) may share in the appreciation of your property.

The formal ‘Agreement’ provides you with purchasing power and protects all parties.

The benefits:

• Helps increase your borrowing power to buy your dream home.

• There is a formal agreement recognising the contribution is in effect a loan, but if the contributor wants to instead make the money a gift (i.e forgive the loan) they can do so.

• The home, assets and credit rating of the family member contributing are not at risk.

• Contributors can share in any increase in property value.

• If the home buyer can reduce the amount borrowed from Bank First to 80% or less of the property valuation, they can save on average over $10,000 in Lenders Mortgage Insurance (LMI) costs.

Want to know more about how First Start works? Check out our First Start Shared Equity Agreement (SEA) Information Flyer

Unlike a Shared Equity Agreement (SEA), a Family Guarantee allows the home buyer’s family to assist with your property purchase without having to provide cash. A family member, generally the home buyer’s parents, can use the equity in their home as additional security towards your home loan. This additional security on the loan, reduces the risk to the lender.

A Family Guarantee helps you maximise the amount you can borrow, possibly more than 95% of the value of the property and may also reduce or avoid the need for you to pay Lenders Mortgage Insurance (LMI).

The home buyer's parents may be in a position to Gift money towards a deposit for a first home.

There is a requirement for the parents to provide evidence that the money is a Gift and not a loan that needs to be repaid. As with a Family Guarantee, a Gift may assist in reducing or avoiding the need to pay Lender’s Mortgage Insurance, if the loan amount is 80% or less of the property value.

Saving a deposit for your home is never easy, for more information on deposit assistance and your various options refer our case studies:

• How family can help with your deposit

• Extra ways to get help with a deposit

• How to increase your borrowing power

• What is acceptable security for a home loan