The Federal government’s first home loan deposit scheme places have all been filled for this financial year’s allocation. The good news is if you have missed out then there will be another 10,000 spaces available from 1st July.

The scheme launched in January 2020 is to assist Australians in purchasing their first home. With only 10,000 spaces available it was anticipated that the scheme would be fully subscribed within a couple of months.

There are around 110,000 first home purchases in Australia, the scheme allows first home buyers to purchase a property with only 5% deposit through a limited number of lenders.

Normally if you were to purchase a home today, you’d most likely need to have 20% of the property’s value saved as a deposit to secure a home loan or pay Lenders Mortgage Insurance.

Eligible buyers have to apply to be allocated a place on the scheme, and those eligible will be able to purchase with a 5% deposit without the need for lenders mortgage insurance.

The scheme is restricted to varying price cap on property purchase price determined by where you are purchasing.

Applicants must be Australian citizens and will also have to have earned less than $125,000 as a single applicant and $200,000 as a couple in the previous financial year.

So, what are the real benefits of the scheme?

• Get on the property ladder quicker
• Save on lenders mortgage insurance. Based on a $400,000* purchase in WA, with a 95% loan this could save between $12,312* and $14,600* depending on the lenders mortgage insurance premium (as these are different with each lender – some use their own insurance, QBE or Genworth)

And the cons…

• Restricted to purchases under $400,000
• May pay a slightly higher interest rate as many lenders have a rate loading for loans with loan to value ratios higher than 80%

Want to see if you qualify, then book your appointment today. Call us on 08 9304 9682.

*Figures are for general information only and are based on a qualifying purchase at $400,000 and the purchaser being an Australian citizen/permanent resident and also being eligible for the First Home Owners Stamp Duty Rebate. Lenders mortgage insurance premiums vary form lender to lender and premiums vary dependent on loan to value ratio.