As a first home buyer, saving for a deposit for your first home can be challenging. The Australian Federal Government have created new Government Initiative to help first home buyers overcome the initial hurdle of saving for a house deposit.
A Buyer’s Guide to the First Home Loan Deposit Scheme was created to help first home buyers achieve their home ownership goals.
What is the First Home Loan Deposit Scheme?
The First Home Loan Deposit Scheme is an Australian Federal Government Initiative to assist first home buyers into their first home sooner, The First Home Loan Deposit Scheme provides a guarantee that will allow first home buyers purchase their first home with a deposit as little as 5% without needing to pay Lender’s Mortgage Insurance (LMI). The guarantee is not a cash payment or a deposit for your home loan.
How will this help first home buyers?
By using the First Home Loan Deposit Scheme, a first home buyer will only need as little as a 5% deposit for their first home. This will make it a lot easier to help Australian’s own their first home sooner rather than later and minimise the time required to save for a deposit.
Will this be available to every first home buyer in Australia?
The First Home Loan Deposit Scheme will assist 10,000 Australians purchase their first home. The Scheme acts on a First In, Best Dressed basis.
Do I have to apply for the First Home Loan Deposit Scheme if I am buying my first home?
No you certainly don’t have to apply for the First Home Loan Deposit Scheme if you are planning to buy your first home. However, most first home buyers see this as a helpful tool and want to take advantage of the opportunity by applying to see if they are eligible.
If I apply for the First Home Loan Deposit Scheme, is that the only Government Initiative I can use?
The First Home Loan Deposit Scheme works in conjunction with other Government Initiatives, including State or Territory First Home Owners’ Grant.
Is the First Home Loan Deposit Scheme valid on any home?
Eligible residential properties for the First Home Loan Deposit Scheme include an existing house, townhouse or apartment, a house and land package, land together with a separate contract to build a home, and an off-the-plan apartment or townhouse.
However, each State/Territory’s Capital City, regional centres and rest of State have price caps. For the home to fit within the eligibility criteria of the First Home Loan Deposit Scheme, the value of the residential property that must not exceed the relevant price cap for the area in which it is located.
How do I know if I am eligible for the First Home Loan Deposit Scheme?
Although the Australian Federal Government wants to assist first home owners into their new home, you must meet a certain criteria to be eligible for the First Home Loan Deposit Scheme. If you meet the following criteria, you might be eligible for the First Home Loan Deposit Scheme.
- You are 18 years or older;
- You are an Australian citizen;
- Must be a first home buyer and never held an interest in a property in Australia either separately or joint with someone else;
- You comply by one of the following income caps:
- Taxable income of $125,000 per annum for an individual applicant; or
- Taxable income of $200,000 per annum for a couple;
- If you are applying with someone else, you must be married or in a de-facto relationship with each other;
- Must have at least 5% of the value of an eligible property saved as a deposit; and
- Applicants must be applying for a home that will be their principal place of residency.