Changes To ‘First Home deposit’ Scheme
The Australian Government has moved to assist more first-home buyers with a new scheme.
Having come into effect as of 1st of January 2020, the scheme allows those looking to buy their first home to possess a 5% deposit on the value of the property to make a purchase.
These first home buyers will also be exempt from paying Lenders Mortgage insurance- in place of this, the Government will act as the guarantor of the balance of the loan and cover the residual mortgage insurance costs.
The government hopes that eligible first home buyers will be able to save for their first home in half the time as a result of the scheme.
How does it work?
● The new scheme will be available for individuals earning a taxable income of up to $125k / annum and couples with a combined income of up to $200k / annum.
● Loans must be principal and interest.
● Loans must be for owner-occupied property only.
Eligible individuals must only access the scheme for properties valued up to a certain value.
These price thresholds vary according to location – see below:
Only two big banks will be able to take part in the scheme; NAB, and Commonwealth Bank. The rest of the loans will be provided by smaller lenders including CUA, Australian Military Bank, MyState Bank and P&N Bank who are all on Smartline’s panel.
Get in quick, as only 10,000 guarantees are available per the calendar year and it’s first in best dressed.