First Home Loan Deposit Scheme reaches capacity

author-avatar By on May 27, 2020
First Home Loan Deposit Scheme reaches capacity

Photo by Priscilla Du Preez on Unsplash

The Morrison Government's First Home Loan Deposit Scheme has been filled, after the 10,000 limit of borrower guarantees was reached last week.

Data collected by the National Housing Finance and Investment Corporation (NHFIC) shows that 5,500 guarantees have already been issued through the scheme while a further 4,500 first home buyers have been reserved guarantees for property purchases in the coming months.

Minister for Housing Michael Sukkar said the scheme had proven popular despite the economic crisis brought on by the pandemic.

"Despite the COVID-19 health crisis causing a slight flattening of demand in the Scheme in mid-March, first home buyers have shown huge confidence in the housing market and have moved quickly to secure the remaining guarantees available before the 30 June deadline," Mr Sukkar said. 

Over half (58%) of the guarantees were made to borrowers under the age of 30, while 59% were made to singles.

The average income of single borrowers was $67,387 while the average combined income of couples who received guarantees was $109,525.

Interestingly, 11% of applicants for the scheme were over 40 years of age.

"This is is a clear indication the Scheme is helping Australians who are a bit older and may have struggled in the past to get a deposit together," Mr Sukkar said.

Buying a home or looking to refinance? The table below features home loans with some of the lowest variable interest rates on the market for owner occupiers.

Provider
Ad rate
p.a.
Comp rate*
p.a.
Monthly
repayments
 
Budget Home Loan OO P&I
2.68% 2.74% $1,618 Go to site
2.89% 2.89% $1,663 More details
2.39% 2.40% $1,558 More details

Base criteria of: a $400,000 loan amount, variable, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. If products listed have an LVR <80%, they will be clearly identified in the product name along with the specific LVR. The product and rate must be clearly published on the Product Provider’s web site. Introductory rate products were not considered for selection. Monthly repayments were calculated based on the selected products’ advertised rates, applied to a $400,000 loan with a 30-year loan term. Rates correct as at 14 July 2020. View disclaimer.

First home buyers who missed out will get a second chance to apply for the scheme when it reopens from July 1 for a further 10,000 guarantees.

If you can't wait until then, first home buyers could still be in with a chance.

"While all places have been reserved,  some places may become available again when they expire or applicants do not proceed to buying a property," the NHFIC said.

"As such, it is still possible for borrowers to reserve a Scheme place should one become available."

The First Home Loan Deposit Scheme allows eligible first home buyers to purchase property with as little as 5% deposit and avoid paying costly Lenders Mortgage Insurance (LMI). 


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 2019. They are (in descending order): Credit Union Australia, 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 2019) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.

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 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.

*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.

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author-avatar
Emma joined Savings.com.au as a Finance Journalist in 2019. She is a journalist with more than five years experience across print, broadcast and digital media, with previous stints at Style Magazines, 4ZZZ radio, and as editor of The Real Estate Conversation. She's most passionate about improving the financial literacy of young women and millennials by writing about complex financial topics in a way that's easy for the average Joe (or Jill) to understand. When she's not writing about finance she's watching Greys Anatomy (again).

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