What is the First Home Loan Deposit Scheme?

With a Royal Banking Commission in 2019, many first home buyers found securing finance to get into the market harder than ever. To assist buyers to purchase their first home sooner and stimulate the economy, the Australian Government has introduced the First Home Loan Deposit Scheme.

The scheme will support 10,000 guaranteed loans per financial year nationally starting from January 2020. Following some conditions. Eligible purchasers can use the guarantee alongside other government programs such as the First Homer Buyers Grant or stamp duty concessions to secure a loan.

The scheme assists singles and couple who have a 5% deposit saved for an eligible property to guarantee the loan – avoiding the need for lenders mortgage insurance. If you have over 20% saved you will not be eligible.

Who is eligible for the scheme?

To be eligible for the First Home Loan Deposit Scheme first home buyers must:

  • Be an Australian Citizen of at least 18 years of age.
  • Single with a taxable income of up to $125,000
  • Couples (married or de-facto relationship) with taxable income of up to $200,000
  • Purchasers must be a first home buyer who has not owned property in Australia individually or jointly.
  • Purchasers must intend to be the owner occupier of the property

Find out full details about eligibility here: http://www.nhfic.gov.au/what-we-do/fhlds/eligibility/

South Australian Price Threshold

The value of any applicants residential property must not exceed a certain price cap. Due to differing markets and median incomes levels per state – each region has different levels.

For South Australia capital city and regional centres cap at a property value of $400,000 and $250,000 for the rest of the state. You can research suburbs or postcodes property threshholds on the NHFIC’s website: http://www.nhfic.gov.au/what-we-do/fhlds/eligibility/

Applying

The NHFIC has designated 27 residential mortgage lenders that will be able to offer guarantees under the scheme. National major lenders are NAB (National Australia Bank) and Commonwealth Bank of Australia.

25 other non-major lenders will be offering guaranteed loans from February 2020. South Australian lenders include Beyond Bank and People’s Choice Credit Union.

To apply you can lodge an application through participating lenders and their authorized representatives.

Any advice in this blog is of a general nature only and has not been tailored to your personal circumstances. Please seek personal financial advice prior to acting on any information. Lanser, nor their employees or directors give any warranty of accuracy, nor accept any responsibility for errors or omissions in this blog. While it is believed the information is accurate and reliable, this is not guaranteed in any way. See our full disclaimer.

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