11% of applicants for First Home Loan Deposit Scheme are over 40-years-old

author-avatar By on February 13, 2020
11% of applicants for First Home Loan Deposit Scheme are over 40-years-old

Photo by Maria Ziegler on Unsplash

Middle-aged Australians are also hoping to utilise the scheme to become first home buyers, according to new data.

You may not think anyone over the age of 40 would be applying for their very first home, let alone anyone in their fifties - but Ripley's believe it or not, they are.

According to data from the National Housing Finance and Investment Corporation, 11% of applicants for the First Home Loan Deposit Scheme are aged between 40 and 59-years-old. 

The scheme, which launched on 1 January, helps eligible first home buyers secure a home loan with a deposit as low as 5% without having to pay Lenders Mortgage Insurance (LMI).

Figures from NHFIC show that while the majority of applicants were aged between 18-29 (55%), 11% of applicants (roughly over 500) were over the age of 40. 

The guarantee is limited to 10,000 loans each financial year. Since launching, nearly 6,000 guarantees have been reserved for first home buyers according to Housing Minister Michael Sukkar, who updated Parliament yesterday. 

Of those, 3,000 places have progressed to pre-approval. Over 1,100 first home buyers in New South Wales have been given pre-approval, followed by Victoria (800), Queensland (700), Western Australia and South Australia (150 each), and over 100 in Tasmania, the Australian Capital Territory and the Northern Territory.

"It's very pleasing that these places have been distributed throughout the country in cities, regional centres and rural areas and also the scheme is reaching the Australian's the Prime Minister wanted us to reach, people on middle incomes," Mr Sukkar said. 

According to the NHFIC, the average income for singles who have applied for the scheme is $67,000 while the average income for couples is $110,000. That's compared with the scheme's income threshold of $125,000 for singles and $200,000 for couples, which previously came under fire for being too high.

CoreLogic's Head of Residential Research Australia Eliza Owen recently said the income thresholds risked giving advantage to those who could have gotten into the scheme without assistance.

"That is because they can save a 5% deposit more quickly, and the scheme is currently limited to 10,000 guarantees a year, awarded on a 'first-in, first served basis. High income earners are being offered the same advantage as lower income earners," Ms Owen said last month.  

"The scheme, in its current state risks awarding home ownership to those who may have otherwise attained it with time."

The table below displays a selection of variable-rate home loans on offer, featuring a low-rate pick from each of the following three categories: the big four banks, the top 10 customer-owned banks, and the larger non-banks.

Lender
Advertised rate Comparison rate Monthly repayment Rate TypeOffsetRedrawOngoing FeeUpfront FeesLVRLump Sum RepaymentAdditional RepaymentsPre-approval
VariableMore details
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
VariableMore details
AN EASY ONLINE APPLICATION

Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)

  • Unlimited additional repayments
  • Unlimited free redraws
  • Optional 100% offset can be added for $120 p.a.^
AN EASY ONLINE APPLICATION

Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)

  • Unlimited additional repayments
  • Unlimited free redraws
  • Optional 100% offset can be added for $120 p.a.^
FixedMore details
NO UPFRONT OR ONGOING FEES

Basic Home Loan Fixed (Principal and Interest) (LVR < 70%) 3 Years

NO UPFRONT OR ONGOING FEES

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. Rates correct as of October 17, 2021. View disclaimer.


Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:

  • The big four banks are: ANZ, CBA, NAB and Westpac
  • The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2020. They are (in descending order): Great Southern Bank, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
  • The larger non-bank lenders are those who (in 2020) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.
  • If you click on a product link and you are referred to a Product or Service Provider’s web page, it is highly likely that a commercial relationship exists between that Product or Service Provider and Savings.com.au

Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site.

In the interests of full disclosure, Savings.com.au, Performance Drive and Loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.

*Comparison rate is based on a loan of $150,000 over a term of 25 years. Please note the comparison rate only applies to the examples given. Different loan amounts and terms will result in different comparison rates. Costs such as redraw fees and costs savings, such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.

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author-avatar
Emma Duffy is Assistant Editor at Your Mortgage and  Your Investment Property Mag, which are part of the Savings Media Group. In this role, she manages a team of journalists and expert contributors committed to keeping readers informed about the latest home loan and finance news and trends, as well as providing in-depth property guides. She is also a finance journalist at Savings.com.au which she joined shortly after its launch in early 2019. Emma has a Bachelor in Journalism and has been published in several other publications and been featured on radio.

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