First Home Loan Deposit Scheme extended ahead of Federal Budget

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on October 03, 2020
First Home Loan Deposit Scheme extended ahead of Federal Budget

Photo by R ARCHITECTURE on Unsplash

The Federal Government will extend the First Home Loan Deposit Scheme, adding an additional 10,000 places to stimulate the economy and support construction.

The First Home Loan Deposit Scheme allows first home buyers to enter the market sooner by purchasing with a deposit as little as 5% by guaranteeing up to 15% the value of the home, saving them from paying Lenders Mortgage Insurance (LMI).

The scheme, which has already helped close to 20,000 first home buyers, is currently limited to 10,000 places each financial year on a first in, best dressed basis. 

But the Federal Government will now allow an additional 10,000 first home buyers to enter the scheme from October 6 until June 30, 2021. 

But there's a catch - this time around, applicants will only be able to apply for the scheme on the condition they are purchasing new builds. 

Looking to compare low-rate, variable home loans? Below are a handful of low-rate loans in the market.

Lender

Variable
More details
UNLIMITED REDRAWSSPECIAL OFFER
  • 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%
UNLIMITED REDRAWSSPECIAL 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%
Variable
More details
AN EASY DIGITAL APPLICATION
  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
AN EASY DIGITAL APPLICATION

Neat Variable Home Loan (Principal and Interest) (LVR < 60%)

  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
Variable
More details
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES
  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
Variable
More details
NSW/VIC/SA METRO & INNER REGIONAL AREAS$5000 CASHBACK. T&Cs APPLY.
  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
NSW/VIC/SA METRO & INNER REGIONAL AREAS$5000 CASHBACK. T&Cs APPLY.

Variable Home Loan (Principal and Interest)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services

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 be 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. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of May 25, 2022. View disclaimer.

Treasurer Josh Frydenberg said this is to help support the residential construction industry.

"Helping another 10,000 first home buyers to buy a new home through our First Home Loan Deposit Scheme will help to support all our tradies right through the supply chain including painters, builders, plumbers and electricians," Frydenberg said.

"In addition to the Government’s HomeBuilder program, these measures will support residential construction activity and jobs across the industry at a time when the economy and the sector needs it most."

New property price caps will also apply under the extended scheme.

First home buyers will be able to purchase new homes worth up to $950,000 in Sydney, $850,000 in Melbourne, $650,000 in Brisbane, $550,000 in Perth, Adelaide, Hobart, Canberra and Darwin.

First home buyers must apply for the scheme through one of the 27 lenders taking part in the scheme to be eligible.

Housing Industry Association Managing Director, Graham Wolfe welcomed the news, saying the scheme has helped thousands of first home buyers realise their dream of home ownership sooner.

“The fact that demand from first home buyers is so great that the Government has decided to expand the Scheme, shows what HIA’s research has suggested all along – Australians still cling to the dream of home ownership and the security it brings," Wolfe said.

“The extra 10,000 places for new homes and apartments that the Government has put into this Scheme will ensure more first home buyers achieve their goal of owning a home sooner."

The announcement comes ahead of Tuesday's Federal Budget which is expected to show a deficit of over $200 billion.


Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered. 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. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please visit the web site links at the bottom of this page.

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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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