HomeStart loans help first home buyers into their own home for as little as 2 per cent deposit

It sounds too good to be true – but here’s how you can get into your first home with a deposit of just 2 per cent.

Nearly 1400 first home buyers were helped into home ownership by state government owned home lender HomeStart in the last financial year, new data shows.

In 2022-23, HomeStart provided loans to 1394 first home buyers – the highest number in a decade.

HomeStart provides eligible South Australians a loan to buy their first home with as little as a 2 per cent deposit on the Graduate Loan, or 3 per cent on the Low Deposit Loan.

The Graduate Loan is available to graduates with a Certificate III or higher qualification.

In total, HomeStart provided 2046 loans in 2022-23 – also a decade-high figure. The data is contained in HomeStart’s most recent annual report, which has been tabled in parliament.

Three-quarters of loans went to applicants with income levels that would make them eligible for affordable housing, with the average customer reporting an annual income of $68,000.

The scheme does not charge Lenders Mortgage Insurance, which can also save thousands in upfront costs.

At the June state budget, the government abolished stamp duty for first home buyers on new homes with a value of up to $650,000. First home buyers can also apply for the $15,000 First Home Owners Grant.

Treasurer Stephen Mullighan said everyone deserves secure and affordable housing.

Treasurer Stephen Mullighan. Picture: NCA NewsWire/Naomi Jellicoe

“Low deposit loans through HomeStart are making a real difference, helping lower-income South Australians achieve the home ownership dream, even while interest rates are increasing,” he said.

“We know for many young South Australians home ownership has never felt further from reach; HomeStart is helping to get it back within their grasp.”

HomeStart Chief Executive Andrew Mills said it was pleasing to support homebuyers even as interest rates and living costs are increasing.

“It’s also not only first homebuyers we’re helping, but an increasing number of South Australians re-entering the housing market,” he said.

“Our ability to convert renters into homeowners, particularly into new affordable housing, is also helping ease pressure on the rental market.”