As of July 1, we began a new financial year and for first home buyers this now brings a new opportunity. The First Home Loan Deposit Scheme is an Australian Government initiative to assist First Home Buyers and in some cases single parents in purchasing their home sooner. This is no new scheme however the rules and eligibility surrounding it brings a greater advantage for first home buyers.
This financial year 50,000 places are available for the scheme. This is the most ever offered to first home buyers and single parents; but it doesn’t stop there. In additional to more people being able to access the scheme, the property price cap has also increased. The new price cap for the Perth Metropolitan area is $600,000.
What is the Scheme?
When a First Home Buyer goes to purchase a property they need to have a large amount of savings which forms a deposit for their purchase. If the buyer has less than 20% of the value of the property then they will have to pay Lenders Mortgage Insurance (LMI). This is an additional cost to the homeowner and also means more savings are needed for the loan to be approved. For example, if you were looking to purchase a home in the metropolitan area and looking to pay $500,000 for the property you would need $100,000 in savings to avoid a loan with lenders mortgage insurance.
If you are eligible for the government scheme the need for Lenders Mortgage Insurance is removed as the government is guaranteeing the home loan due to the First Home Loan Deposit Scheme. This also means the required deposit is reduced and on a $500,000 purchase, the minimum deposit is $25,000.
Who is eligible?
- Australian Citizens who are a first home buyer or a single parent
- At least 18 years of age
- Earning up to $125,000 or individuals and $200,000 for couples.
- Intending to be owner-occupiers of the purchased property
- First home buyers who have not previously owned or had an interest in a property in Australia.
Which lenders offer the home loans?
There are two major banks along with a number of smaller lenders who offer extended lending solutions for people wanting to access this scheme. Speak to your Launch Finance broker to find out more.
What is the maximum purchase price of a property to be eligible?
- WA Capital City: $600,000
- WA Other: $450,00
- Search your future property suburb here and check the price cap in the area you are looking to buy in. https://www.nhfic.gov.au/what-we-do/property-price-caps/
Need more details?
If you are a First Home Buyer and want to know if you are eligable for this scheme contact a Launch Finance broker today. All of our brokers are experts in this field and understand the rules and guidelines. They can guide you through the process to see if you are eligible.
Contact (08) 9367 4222 or email [email protected] and our award-winning team can help you today.