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.

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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). 

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Disclaimers

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