Unlocking Homeownership: How First Homebuyers Can Benefit from the 5% HGS Grant
- Rebecca Jackson
- Jan 24
- 2 min read
Buying your first home can feel like an uphill battle. High property prices and upfront costs often stand in the way of turning the dream of homeownership into reality. Fortunately, the 5% Home Grant Scheme (HGS) offers a valuable opportunity for first homebuyers to ease the financial burden and step onto the property ladder sooner.
What Is the 5% HGS Grant?
The 5% HGS grant is a government-backed financial assistance program designed to help first homebuyers cover part of their home purchase costs. Specifically, it provides a grant equal to 5% of the property’s purchase price, which can be used toward the deposit or other upfront expenses. This grant reduces the amount buyers need to save before applying for a mortgage, making homeownership more accessible.
Who Qualifies for the Grant?
Eligibility criteria vary by region, but generally, the grant targets:
First-time homebuyers who have never owned property before
Buyers purchasing a property within a specified price range
Applicants who meet income limits set by the program
Those who intend to live in the property as their primary residence
For example, a couple earning a combined income below the threshold and buying a home priced at $400,000 could receive a $20,000 grant to help with their deposit.
How the Grant Helps First Homebuyers
Lower Deposit Requirements
Saving for a deposit is often the biggest hurdle for first homebuyers. The 5% grant can significantly reduce this amount, allowing buyers to qualify for a mortgage sooner. For instance, instead of needing a 20% deposit ($80,000 on a $400,000 home), the grant covers $20,000, so the buyer only needs to save $60,000.
Reduced Loan-to-Value Ratio
With a larger deposit, buyers can secure better mortgage terms. Lenders often offer lower interest rates and avoid requiring costly mortgage insurance when the deposit is higher. This means monthly repayments become more affordable.
Faster Path to Ownership
By easing upfront costs, the grant helps buyers enter the market earlier. This can be especially valuable in areas where property prices are rising quickly, preventing buyers from being priced out.
Practical Tips for Using the 5% HGS Grant
Check eligibility early: Confirm your qualification before house hunting to understand your budget.
Combine with other schemes: Some regions allow stacking the 5% grant with other first homebuyer incentives.
Plan your finances: Use the grant strategically to cover the deposit or essential upfront costs like stamp duty.
Work with a mortgage broker: They can help you find lenders who recognize the grant and offer favorable loan terms.
Real-Life Example
Sarah and James, a young couple, wanted to buy their first home priced at $350,000. They qualified for the 5% HGS grant, which gave them $17,500 toward their deposit. Instead of struggling to save a full 20% deposit ($70,000), they only needed to save $52,500. This made their mortgage application smoother and allowed them to move into their new home six months earlier than planned.
The 5% HGS grant, can certainly help you move the needle towards your first home purchase, if you want to learn more, feel free to get in touch with Becsta Home Finance.
Rebecca Jackson
Director
Becsta Home Finance
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