New Proposed First Home Buyer Deposit Scheme

The new government (Coalition) has offered $500m to underwrite home loan deposits for first home buyers who can save for a deposit of at least 5%, but who cannot reach the 20% deposit that most banks require. While this first home buyer deposit scheme needs to get across the line and the devil is always in the detail, what we do know about the plan is summarised below:

• Who is eligible? The scheme is targeted to individuals earning up to $125,000.00 pa and couples earning up to $200,000.00 pa, who have saved at least 5% of the value of their first home 

• The Government will guarantee loans up to a value of 20% of the home, thereby removing the need for first home buyers to get costly mortgage lenders insurance

• The scheme may cut the time first home buyers need to save for a deposit in half

• The Government has indicated it will assist the 10,000 first homebuyers into the market – it is not clear if this will be on a first come first serve basis, or if the scheme will be extended to all first home buyers

• The scheme is expected to commence on January 1, 2020

• The scheme would give preference to working with smaller banks and non-bank lenders to boost competition

• The support would stay in place for the life of the loan or until refinanced
• It is likely that the value of homes will be capped on a regional basis, reflecting the different market values

 

For more information on the First Home Buyer Deposit Scheme get in touch with a property buying solicitor at MAP Lawyers today! You can get in touch with our conveyancing firm by calling 1300 680 584 or you can get in touch online!

Updated: 17/02/2022