THE FIRST HOME LOAN DEPOSIT SCHEME

Aussie first home buyers can get into the market sooner, thanks to a new scheme introduced by the Federal Government on January 1, aimed at helping buyers step on to the property ladder without being hit with mortgage insurance or the need for family to act as guarantor. It can also be used in addition to current incentives, like the Queensland First Home Owner’s Grant, making 2020 a fantastic time to buy. 

The First Home Loan Deposit Scheme supports eligible buyers to purchase their first home with a deposit of as little as 5 per cent (compared to the usual deposit requirement of 20 per cent needed to avoid Lender's Mortgage Insurance (LMI), which can add thousands of dollars to your loan).

It acts in a similar way to current guarantee loans (usually secured with the help of parents and family), but the Australian Government acts as the guarantor, meaning first home buyers don’t need to rely on family assistance to own a home sooner.

It’s fantastic news for first home buyers, who will now be able to purchase their first home earlier.

We’ve put together some top-line points to help check if you could benefit from this new scheme:

 

THE NUTS AND BOLTS

The First Home Loan Deposit Scheme (FHLDS) provides a guarantee for first home buyers, allowing them to purchase a home with a deposit of as little as 5 per cent - without the cost of Lender's Mortgage Insurance.

This support will be given to up to 10,000 loans each financial year, and can be combined with other government programs (like the $15,000 Queensland First Home Owners’ Grant) to get buyers into a new home sooner.

The FHLDS guarantees the difference between the first home buyer’s deposit (of at least 5 per cent) and 20 per cent of the property value, and stays in place until the loan is refinanced, the home value increases or the house is sold.

 

AM I ELIGIBLE?

Both singles and couples are eligible for the FHLDS - and there is a handy online tool (found here) to give you a quick glance into if you could benefit from the Scheme.

The basic checklist is:

●  If you pass the income test (a taxable income of $125,000 or less for singles, $200,00 or less for couples)

●  That you haven’t previously owned property

●  That you are an Australian citizen aged 18 or older

●  That you have saved the minimum deposit required (5 per cent of property value)

●  And that you will occupy the home purchased (investment properties are not covered by this Scheme)

 

WHERE CAN I BUY?

To take advantage of the scheme, you need to be aware there are property price thresholds in place, which can change depending on the location of your property.

For example, in Greenbank, the property price threshold sits at $475,000. This means only homes valued at $475,000 or under are eligible for the Scheme.

Here at Everleigh, we have a range of built homes and house and land packages available that fit within the price threshold, so you may wish to get in touch with our Sales Team on 07 3859 5960 or pop into our Sales Office on 56 Kessels Boulevard, Greenbank, to explore your options.

 

SIGN ME UP!

If you meet all of the eligibility requirements, and your home falls under the property price threshold, you can lodge your application for the First Home Loan Deposit Scheme directly through one of the 27 participating lenders.

Currently, the National Australia Bank and Commonwealth Bank of Australia are offering the guaranteed loans. The remaining participating lenders (see the full list here) will begin offering guaranteed loans from February 1.

As part of the Scheme, these lenders should not charge eligible customers higher rates than customers not using the Scheme.

As always, it’s best to consult directly with your lender and seek independent financial and legal advice to find out what loan arrangement best suits you.