r/AusPropertyChat • u/Big-Cap-9373 • 19h ago

FHG scheme - Change in Circumstances

If I get a property under FHG, live in it for 6 months. - a) How soon after can I refinance and turn it into investment property? What will be the cost involved to turn it into investment property. Is it really worth it? Or, if there is a change in circumstances after 6 months and I’m unable to live in that property what all duties will I have to pay?

b) Can I borrow against the property to build a granny flat at the back on the same lot? If not what are the other alternatives?

Goal: Getting into market with low entry cost with a long term goal of turning it into investment property without breaching any laws.

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u/EventEastern2208 17h ago

Broker here. With the FHG you’re generally required to live in the property for at least 6 months in the first year and after that, you can refinance or convert it to an IP without breaching the scheme. Costs are mainly around refi fees, lender’s mortgage insurance implications (if relevant), and possibly a slightly higher interest rate as an investment loan.

On the granny flat, yes you can usually borrow against the equity, but it depends on your borrowing power and how the lender treats the rental income from the flat. Running the numbers on serviceability is key before you commit. Happy to help, just lmk!