The Federal Government has committed to assist 10,000 First Home Buyers into the market by topping up their 5% deposits with a government guarantee for 15% of the loan.
However, based on the $500 million in equity the government has set aside, only 1 in 11 buyers will be able to enjoy the benefits of the scheme.
The scheme will remove the need for borrowers to pay Lender’s Mortgage Insurance, saving up to $27,000.
We suggest if you or someone close to you are buying their first home next year, you start planning now.
Single borrowers earning up to $120,000 or couples earning up to $200,000 will be eligible for the First Home Loan Deposit Scheme if they have saved 5% of the value of the property they are seeking to purchase.
Here are a few tips to help you on your way:
- Although the scheme does not start until next year, start planning now to give yourself a chance to be the 1 in 11 who will receive support.
- If you haven’t already, do a budget – click here to access a budget planner
- Start managing your discretionary spending today as lenders are checking borrower’s living expenses closely.
- Be aware of other benefits on offer including grants and stamp duty exemptions by visiting the State Revenue Office in your state or calling us on 1300 1400 15.
- In some cases, the rent you are paying now will be included in the credit analysis to support your ability to meet loan repayments, so ask us to start checking on a suitable lender for you.
- Get pre-approved so you know how much you have to spend. We provide this without cost and it provides you piece of mind when you start looking.
- Cautionary note: We calculate that if you only contribute 5% deposit rather than 20% on a $500,000 property you will pay nearly $60,000 extra in interest over the life of the loan. The solution is, in this low interest rate environment, to pay at least 10% more than the Principal and Interest repayment the lender requires.
is important to know that there are several other ways you can get into your
first home with a low deposit and not pay Lender’s Mortgage Insurance so call
me anytime for a quick chat on 0409 02 99 22.
Good luck with finding your first home it is a very exciting time.