An Overview of the First Home Loan Deposit Scheme
What is the First Home Loan Deposit Scheme?
The First Home Loan Deposit Scheme (‘FHLDS’) is an initiative to help first home buyers achieve home ownership sooner by reducing the required home loan deposit amount to as little as 5%.
The National Housing Finance and Investment Corporation ('NHFIC') guarantees the lender up to 15% and the buyers do not have to pay lenders mortgage insurance (lenders mortgage insurance is usually required where the deposit amount is less than 20%).
The scheme supports up to 10,000 guaranteed loans per financial year and this year has helped almost 20,000 first home buyers to get into their first home sooner.
The FHLDS can be used in conjunction with the many other Government incentives currently on offer for first home buyers, including:
- The First Home Super Saver Scheme;
- The Home Builder Grant;
- The Building Bonus Grant;
- The First Home Owner Grant; and,
- Stamp Duty Concessions.
3rd October 2020: Scheme Extended
On the 3rd of October 2020, the Minister for Housing announced that the scheme would be extended to an additional 10,000 first home buyers between the 6th of October 2020 and the 30th June 2021.
For a property purchase to be eligible under the FHLDS it must be a residential property, this includes:
Note that specific dates and requirements apply depending on the property type.
- An existing house, townhouse or apartment;
- A house and land package;
- Land and a separate contract to build a home; and,
- An off-the-plan apartment or townhouse.
For purchases in Western Australia the maximum purchase price for an eligible property is $400,000 for capital city and regional centres and $300,000 for the rest of the state.
The eligibility criteria for the FHLDS can be summarised as follows:
For a full breakdown of the eligibility requirement please visit the NHFIC website.
- Must be an Australian Citizen;
- Must be over 18 years of age;
- Must satisfy income test (Singles maximum taxable income of $125,000 / Couples maximum taxable income of $200,000 - based on previous financial year);
- Must apply as a single applicant or couple, couples only eligible if they are de facto or married;
- Must have genuine savings of over 5% but less than 20% of property value saved as a deposit;
- Loans under the scheme require principal and interest repayments;
- Must be for an owner-occupier of the purchased property, not an investment property; and,
- Must be a first home buyer with no previous ownership of or interest in a property in Australia.
The 27 major bank and non-major lenders below are able to offer mortgages under the FHLDS.
Achieving Home Ownership In 2020
First Home Buyers Direct are partnered with some of the State's leading mortgage brokers in order to offer our clients a quality in-house finance service. Currently there is an unprecedented level of government support for first home buyers, there has never been a more opportunitic time to see if you can get into your first home.
Contact us today to find out if you qualify to build your first home.
Posted by First Home Buyers Direct on 05 October 2020 | 0 comments
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