Maybe you’ve heard the news about how the Australian Federal Government is trying to make entering the property market more affordable. With the average Aussie national house price at just over $800,000 (domain.com.au), it’s little wonder that saving a 5% deposit, plus stamp fees and Lenders Mortgage Insurance seems unobtainable for many Australians. Or is it??
There are a range of Government-backed schemes geared towards helping a wide range of Australians purchase their own home in a bid to help Aussies have a crack at buying their first home. Let’s go through a couple of them in more detail to see if you’re eligible.
– The First Home Loan Deposit Scheme (FHLDS)
– New Home Guarantee
The First Home Loan Deposit Scheme (FHLDS) is administered through the National Housing and Finance Investment Corporation (NHFIC) and guarantees the lender the difference between your deposit (of at least 5%) and 20% of the value of your first home. This means you can buy your first home sooner without having to pay costly lenders mortgage insurance premiums. There are currently 10,000 places available per financial year, with eligible borrowers able to use the scheme in conjunction with other programs like the First Home Owners Grant or First Home Super Saver Scheme.
Eligible residential properties include an existing established house, townhouse or apartment, a house and land package, land and a separate contract to build a home or an off-the-plan apartment or townhouse.
For full eligibility criteria refer to the fact sheet found below.
The New Home Guarantee is similar to the First Home Loan Deposit Scheme in that it also assists first home buyers to enter the property market without the need to pay Lenders Mortgage Insurance. There are currently 10,000 places available for the Scheme and it assists borrowers to purchase or build a new home with a deposit of as little as 5 per cent (lenders criteria apply). This is due to the NHFIC providing a guarantee to participating lenders of up to 15% of the value of the property purchased that is financed by an eligible first home buyer’s loan. A further 10,0000 New Home Guarantees will be available from 1 July 2021/2022 financial year.
Eligible residential properties include newly constructed dwellings, off the plan dwellings, house and land packages, land and a separate contract to build a home.
The New Home Loan Guarantee could be for you if you’ve never owned your own home and are planning to build a newly constructed dwelling. Like the First Home Loan Deposit Scheme, successful applicants only need a 5 per cent deposit and don’t have to pay any lenders mortgage insurance.
For further information click here: https://www.nhfic.gov.au/media/1685/new-home-guarantee-fact-sheet-19-june-2021.pdf
Written by Jason Pestano