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 | ||||||||||||
| FEATUREDUNLIMITED REDRAWSSPECIAL OFFER | Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)
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Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)
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| Variable | More details | ||||||||||||
| FEATUREDAN EASY DIGITAL APPLICATION | Neat Variable Home Loan (Principal and Interest) (LVR < 60%)
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Neat Variable Home Loan (Principal and Interest) (LVR < 60%)
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| Variable | More details | ||||||||||||
| FEATURED100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES | Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)
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Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)
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| Variable | More details | ||||||||||||
| NSW/VIC/SA METRO & INNER REGIONAL AREAS$5000 CASHBACK. T&Cs APPLY. | Variable Home Loan (Principal and Interest)
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Variable Home Loan (Principal and Interest)
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- 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%
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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