FHOG - Finance Issue

Hi guys,

Hoping to get some advice on the following situation thats just come about..

I have a unit due to settle later this month that was purchased with the intention of becoming my PPOR immediatly on settlement, claiming the FHOG. My Mortgage Broker has now said to me yesterday that because of the banks getting stricter with their lending criteria, I'm no longer meeting their requirements ($600 month short, SOMEhow) as my wage is only 43k p.a net. He suggested perhaps, that it may be possible to claim for a investment loan to ensure a loan does come through, and then if i still want to move into the property I can apply for the FHOG immediately AFTER settlement...

My concern is this,
I've spoken to the SRO and they've said that they don't care what the loan is called, so long as I obide by the rules and do officially live in the property for 6 months to claim the grant. In the mean time however, I'll have to cover the 32k from my own pocket that I was going to receive from the grant. So how long does it take from the time of application for the grant, to the point of actually receiving the money? In this case the full 32k.

Also, once the grant is received, am I able to choose how much of this I want to be added to my home loan and how much I want to just leave in my bank account/spend? I wanted to keep some money in the bank as a buffer but because of the change of circumstances, i'm now going to have to fork out everything I have on settlement.

Finally, I've seen a few people mention in other posts with a similar scenario that "claiming for any stamp duty examptions would be pushing it". I'm not sure what this means.. Could someone maybe explain if my situation will affect the stamp duty at all? If so, how?

I really feel like my mortage broker should have told me sooner of the changing lending criteria, as I could have just picked up a second job, so I'm not impressed and really dont want to lose any money out of this.

I realise I could speak to the SRO again but they're closed over the weekend and I'm stressing a little..

Thanks everyone.
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Yes it was. Signed the contract for 275k in Sept last year, now revalued at 290k by the banks. And i'm in Victoria which I forgot to mention.
OK, so you have tripped over just one of the many traps in buying OTP :(
Between signing up for this property and now, we have had a few IR rises and some changed lending criteria. Just as well the market has moved up and not the other way or you'd be facing tipping some more of your own cash into the deal as well because of a low val.

Anyhows, enough of the object lesson in OTP :p

If you are only $600pm short, then getting an investment loan, where they take rental income into account, as being suggested by your current MB, might get you across the line. However, if you have the full intention of making it your PPOR might be seen by some as financial fraud. Where is Token Funder?

I will leave the 'how do I get out of this mess?' to one of the brokers on the forum.
On the edge of fraud for sure.
Switch lenders if you can and make it legit do it. Sounds like he's going to be doing a rework anyway.
One day banks will pick up on when they look at the transfer and they figure out if the SD paid is for O/Occ or inv.

Depending on the lender you might get away with working on the old policy if a preapproval was in place
Hmmm thanks for your response guys. It all just sounds fishy to me I have to say. I always knew buying off the plan could be risky but with the amount of money I had/have in savings, I never thought there'd be a problem for this property.

I just spoke to the bank on the phone to get a brief idea if the mortage brokers advice has been correct and they're abit confused aswell.

Here is the finer print if anybody out there has the time for a bit of a case study :)

I own 1 IP already in my name, these are the figures..
Value = 340k
Loan = 180k (160k Equity)
Rent = $260 per wk

The figures again of this soon to be PPOR
Purchase Price = 276k
New Value = 290k
5% deposit already paid = 14k
And i am eligable to claim the 32k FHOG

I currently have 50k in savings (which i thought would be more then enough!)

So I was looking to obtain either a 220k Loan (spending another 15k of my money) or a 200k Loan (spending another 35k of my money) and live happily ever after until property no.3.

I have no dependents, and no debt other then my credit card with a capacity of $7,500.
I'm in the same job, earning the same money as I did last year which is 50k GROSS.

If ur a bank manager or broker, what do these figures look like to you off the top of your head?
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Dunno whats goin on there but if its correctly put together you can do a 230 + loan. Reduce your cc to 5 k and draw some equity from the other property so that the overall loan amount is where you want it

How's that work?

Pretty sure it only applies to first PPOR not IP's, which is crap really.

So I could potentially have 10 IP's, but never a PPOR and then claim the FHOG for my first PPOR, crap I say.....should be means tested.

Actually saw a guy on Insight a few years back who was going to do exactly this, he and his wife owned several IP's but no PPOR.
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I was just going from the experience of my sister who missed out on the FHOG because she had had a quarter share in the IP I lived in while at uni. We bought that 5 months before the FHOG came in, although to be honest, I think the FHOG addded to the capital growth we got on it.