Applications for the new First Home Loan Deposit Scheme are now open, with 10,000 guarantees available to first home buyers looking to get a leg up into the property market.
Now, with 10,000 spots it might sound like you’ve got plenty of time up your sleeve to take advantage of the new scheme, but consider this: 110,000 Australians bought their first home in 2018.
So if you’re interested in applying for this scheme, you’ll want to put it at the top of your to-do list in 2020 and get in touch with us ASAP.
Back up a little. What’s this new scheme again?
Ok, so currently people with a deposit of less than 20% usually have to pay Lenders Mortgage Insurance (LMI).
But under the government scheme, first home buyers with only a 5% deposit could be eligible to purchase a property without forking out for LMI.
Now, it’s important to note that this is not a handout – it’s simply a government guarantee.
But this guarantee can give first home buyers a “leg up”, says the federal government, as it could save you as much as $10,000 in LMI insurance.
Any more details?
The scheme commenced on 1 January 2020.
In order to be eligible first home buyers can’t have earned more than $125,000 in the previous financial year, or $200,000 for couples (and both need to be first home buyers).
More details on eligibility can be found here.
The property price caps
Below are the property price caps for each city and regional centre with a population over 250,000, followed by the price caps for the rest of the state.
– NSW: $700,000 (Sydney, Newcastle/Lake Macquarie, Illawarra) and $450,000 (rest of state)
– VIC: $600,000 (Melbourne and Geelong) and $375,000 (rest of state)
– QLD: $475,000 (Brisbane, Gold Coast, Sunshine Coast) and $400,000 (rest of state)
– WA: $400,000 (Perth) and $300,000 (rest of state)
– SA: $400,000 (Adelaide) and $250,000 (rest of state)
– TAS: $400,000 (Hobart) and $300,000 (rest of state)
– ACT: $500,000
– NT: $375,000
Get the ball rolling
If you’re considering purchasing your first home in 2020 but don’t have a 20% deposit saved up yet – get in touch.
We’d love to run you through this new scheme in more detail and, if you’re eligible, help you apply for finance with one of the scheme’s participating lenders.