Will you be Eligible for a 5% First Home Loan Deposit?

Some of our clients have been asking about the Federal Government’s First Home Loan Deposit Scheme and whether it will help them enter the property market.

So what exactly is the scheme and who’s eligible? Here’s a brief run down.

The First Home Loan Deposit Scheme, also called the Government Mortgage Guarantee Scheme, is designed to help regular Australians buy their first home by only needing to save five percent of the deposit, about a quarter of what is normally required.

Under the scheme, the government will guarantee the remainder of the deposit. Buyers will also save approximately $10,000 by not having to pay lenders’ mortgage insurance (LMI).

The government has set caps on the size of the loans for which it will guarantee deposits, depending on where the property is located.

For the Sunshine Coast, the cap looks likely to be $400,000, however with the scheme not coming into effect until January 1, 2020, this might be subject to change. It would be nice to see it bumped up a little.

The incentive is limited to 10,000 borrowers per year, and will be applied on what Finance Minister Mathias Cormann describes as “a first in, best dressed” basis.

For first home buyers only, the program is open to singles earning up to $125,000 per year and couples with a combined taxable income of less than $200,000 per year. Unlike some past first home owner grants, it will be applicable for established homes as well as newly built ones.

While the scheme might just be a drop in the bucket, we would welcome any carefully considered plan to ease the burden of home ownership.

Don’t forget, Henzells is a one stop shop for all your property requirements, including finance. If you have any queries, we’re always available for a chat.

Image Credit: jcomp / Freepik