Jun 12, 2020 2:22:46 PM

First Home Loan Deposit Scheme Topped Up

Topics: Mortgage Broker, First Home Buyer, Home Loans 0

If you missed out on the initial release of the Government’s First Home Loan Deposit Scheme, there is help at hand. Government has announced a further 10,000 spaces under the scheme will be made available for first home buyers from 1 July 2020 but warns that these are likely to fill up fast. Read on to find out how this scheme could help you into your first home.

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A Helping Hand

The federal Government’s First Home Loan Deposit Scheme is an initiative designed to help first home buyers entering the property market. Under the scheme, first time home buyers may be approved for a mortgage with just a 5 per cent deposit without having to pay Lenders Mortgage Insurance (LMI).

As most lenders require a minimum 20 per cent deposit in order to be exempt from paying LMI, the scheme could help borrowers who may be struggling to reach this threshold but who have managed to save at least 5 per cent of the value of a property they plan to buy.

With the cost of LMI being dependent on the size of the loan and the amount borrowers have saved in the form of a deposit, this could be a sizeable saving for many first home buyers.

Determining eligibility

The scheme is open to first home buyers who earn up to $125,000 per annum or couples with a combined income of up to $200,000. Borrowers must have saved at least 5 per cent of the value of the property they are planning to purchase.

The number of home loans available under the scheme is capped at 10,000 per year, but the Federal Government announced recently it would be extending this number to a further 10,000 for 2020.

Property price caps for each state or territory mean high-value properties will not be underwritten by the scheme. The property price caps for each state are listed below:

State/territory

Capital city and regional centres

Rest of state

NSW

$700,000

$450,000

VIC

$600,000

$375,000

QLD

$475,000

$400,000

WA

$400,000

$300,000

SA

$400,000

$250,000

TAS

$400,000

$300,000

ACT

$500,000

-

NT

$375,000

-

Once eligibility has been assessed and approved for the scheme, borrowers can work with their mortgage broker to apply for a mortgage with a lender and the government acts as guarantor for the loan.

More help available

Even if you don’t qualify for the Government’s First Home Loan Deposit Scheme, there are still solutions for you as a first home buyer. Talk to your Mortgage Express broker about the First Home Owner Grants available in your state or territory, as these once-off lump sum subsidies could be the boost you need to get your foot onto the property ladder.


Disclaimer:

While all care has been taken in the preparation of this publication, no warranty is given as to the accuracy of the information and no responsibility is taken by Finservice Pty Ltd (Mortgage Express) for any errors or omissions. This publication does not constitute personalised financial advice. It may not be relevant to individual circumstances. Nothing in this publication is, or should be taken as, an offer, invitation, or recommendation to buy, sell, or retain any investment in or make any deposit with any person. You should seek professional advice before taking any action in relation to the matters dealt within this publication. A Disclosure Statement is available on request and free of charge.

Finservice Pty Ltd (Mortgage Express) is authorised as a corporate credit representative (Corporate Credit Representative Number 397386) to engage in credit activities on behalf of BLSSA Pty Ltd (Australian Credit Licence number 391237) ACN 123 600 000 | Full member of MFAA | Member of Australian Financial Complaints Authority (AFCA) | Member of Choice Aggregation Services.