The Housing Industry Association (HIA) said yesterday's report on the First Home Loan Deposit Scheme (FHLDS) "outlines the initial success of the first release of 10,000 guarantees". 

"HIA is pleased to see the findings show the Scheme is providing support in home ownership for first home buyers and overcoming the deposit savings trap," HIA said. 

“The time it takes to save a deposit is always a challenge for first home buyers, but today more than ever, combining this with tougher lending restrictions had meant first home buyers were waiting years to achieve their home ownership dream."

“In this time of COVID-19, choosing to take the step of home ownership is not a decision taken lightly by first home buyers. The confidence they have shown to make this decision in the first half of the year is extremely encouraging."

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

Lender

VariableMore details
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  • Immediate cashback upon settlement
  • $2,000 for loans up to $700,000
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loans.com.au – Variable Basic Cashback Home Loan (Principal and Interest) (LVR < 70%)

  • Immediate cashback upon settlement
  • $2,000 for loans up to $700,000
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VariableMore details
Refinance OnlyApply In Minutes
  • No application or ongoing fees. Annual rate discount
  • Unlimited redraws & additional repayments. LVR <80%
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
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Unloan – Variable Rate Home Loan – Refinance Only

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  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
VariableMore details
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  • Get fast pre-approval
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  • Redraw freely - Access your additional payments when you need them
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  • Home loan specialists available today
VariableMore details
Unlimited RedrawsApply In Minutes
  • Low Deposit (<95% LVR) with No LMI required
  • Unlimited Redraw and additional repayments
  • No Application or ongoing fees
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Sucasa – Ultra Low Rate (Variable) - <95% LVR - No LMI (New Purchases)

  • Low Deposit (<95% LVR) with No LMI required
  • Unlimited Redraw and additional repayments
  • No Application or ongoing fees
Important Information and Comparison Rate Warning

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. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. 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 February 27, 2024. View disclaimer.

Released yesterday, the National Housing Finance and Investment Corporation's (NHFIC) report on the FHLDS scheme found that one in eight first home buyers who purchased between March and June 2020 did so using the scheme. 

On average, the scheme helped the average applicant save four years on the home buying process by reducing the deposit requirements, and the median applicants were in the 25-34 age bracket. 

According to the report, the scheme has "geographical reach supporting first home buyers across the country with strong interest from buyers in outer metropolitan and regional areas", and has "cemented itself as part of the first home buyer support policy architecture". 

“HIA has long argued there needs to be a national approach to help first home buyers enter the market and address the time it takes to save for a deposit," HIA said. 

"The findings from the report confirm HIA’s view that this type of government support provides a significant boost for first home buyers.

“The report asserts the Scheme enabled first home buyers to bring forward their purchase by an average of four years. This means many more young Australians are getting into a home and building their financial future sooner."

More spots needed for home builders 

While the FHLDS scheme, in HIA's words, "was the right solution to a real problem", HIA also argued that the scheme needs to be expanded to help those building their own home from scratch, rather than buying. 

According to the report, just 10% of successful applicants purchased a newly constructed dwelling.

In a pre-budget submission made on 24 August, HIA said the scheme is not well suited to the new home building process. 

"In March, HIA called on the Government to provide a dedicated allocation of places under the scheme for new home buyers to ensure the economic benefits of home building are also part of its success," the submission said. 

"The second release of a further 10,000 places on 1 July 2020 has now commenced and the take up rate appears strong despite COVID-19 but the same concerns exist that new home buyers may not be participating in the scheme."

Looking to build your own home? The table below features construction loans with some of the lowest interest rates on the market for would-be home builders.

Lender

VariableMore details
  • Interest Only during construction
  • No monthly, annual or ongoing fees
  • Get Australia’s lowest rate construction loan when you go green

loans.com.au – Green Construction Home Loan (Interest Only)

  • Interest Only during construction
  • No monthly, annual or ongoing fees
  • Get Australia’s lowest rate construction loan when you go green
VariableMore details

Great Southern Bank – Basic Variable Owner Occupier Construction (LVR ≤ 70%)

    VariableMore details

    loans.com.au – Solar Construction 90

      VariableMore details

      Geelong Bank – HomeBuilders Loan (Interest Only) (LVR < 80%)

        VariableMore details
        • Interest-only during construction
        • No monthly or ongoing fees

        loans.com.au – Construction Home Loan (LVR < 90%)

        • Interest-only during construction
        • No monthly or ongoing fees
        VariableMore details

        La Trobe Financial – Construction Home Loan

          VariableMore details

          Gateway Bank – Construction Home Loan

            Important Information and Comparison Rate Warning

            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. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. 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 February 27, 2024. View disclaimer.

            In its submission, HIA recommended that:

            • additional places in the scheme be allocated in 2020/21 for new home buyers; and
            • the process and timeframes for confirming these places be amended to recognise the time involved inbuilding a new home

            “Increasing the number of applicants able to access the Scheme would not only help to boost the economy, but will clearly help lower and middle income workers move into a home of their own much sooner.”

            [Read: High demand expected for First Home Loan Deposit Scheme round two]

            HIA's recommendation has previously been put forward by the Labor Opposition. 

            Shadow Minister for Housing and Homelessness Jason Clare said in late June that the scheme should be expanded to include building new homes, which would support tradies.

            "Labor is calling on the Morrison Government to expand the scheme by lifting the cap for first home buyers who build new homes," Mr Clare said in a statement. 

            "This will assist first home buyers on low and middle incomes build a new home with a deposit of as little as 5% without the requirement to pay for lenders mortgage insurance, and keep tradies building homes instead of building a longer dole queue."

            "Labor called for this on 30 May but it was ignored by the Government in its HomeBuilder scheme which has been panned as badly targeted and too small to save a lot of tradie jobs."

            HomeBuilder, the scheme introduced to stimulate home construction and renovation, has so far had a slow uptake, with the Treasury revealing in mid-August that just 247 applications have been made across the country so far. 

            However, states have only started accepting applications in the last few weeks.

            [Read: HomeBuilder: Good? Bad? Both? How the experts reacted]





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