The First Home Loan Deposit Scheme explained
On the 1st January 2020, the Australian Government launched the First Home Loan Deposit Scheme. It provides a guarantee allowing eligible first home buyers on low and middle incomes to buy a home with a deposit of as little as 5 per cent (subject to their lender’s criteria).
Potential applicants can choose from a panel of participating lenders, which includes major banks and smaller lenders.
How many people can access the Scheme?
The scheme is capped at 10,000 places this financial year. A further 10,000 places will become available from July 2020.
In January, lenders registered 3,000 potential first home buyers under the Scheme. From the 1st February 2020, 7,000 additional places became available.
Who is eligible?
Key eligibility criteria include:
You can check whether you’re eligible using this handy online tool. You can also find further information about eligibility here, or better yet, speak to us and we’ll run through the eligibility requirements with you.
To be eligible, the property you intend to buy must also meet certain requirements. For example, it must:
You can find further information about property requirements here.
Are all home loans eligible?
No. There are certain rules about the type of home loan which can be accessed under the Scheme.
For example, you must take out a principal and interest loan (exceptions may be granted to borrowers constructing a new dwelling) with a term of 30 years or less (with no changes to loan terms). You must use all of the proceeds for the purchase (or towards the purchase and improvement) or construction of the eligible property, and your loan commitment must not be less than 80 per cent of the value of the property, nor more than 95 per cent.
Talk to us about your plans and we’ll explain the home loan requirements.
Ready to buy your first home in 2020? We’re here to help!
If you’d like to find out more about the First Home Loan Deposit Scheme and other incentives available to you, please reach out. We can walk you through the eligibility requirements and lodge your application with a participating lender on your behalf.
Remember, now is a great time to buy property. Housing affordability has improved in many markets, some lenders have dropped their mortgage rates and home loan servicing rules have relaxed. Start 2020 with a BANG – with a property purchase!