The Federal election is done and dusted, and with a bit more certainty around government policy, we can all get back to making plans for the future.
If plans to buy a first home, next home or an investment property are on your radar, here’s what you need to know.
First home buyers
Great news for first home buyers. Shortly before polling day, the Morrison Government announced a new helping hand for first home owners.
The First Home Loan Deposit Scheme is a fresh initiative that lets first home buyers purchase a home with a deposit as low as 5% and savings of around $10,000 in lenders mortgage insurance.
It’s a step designed to fast-track first home buyers into a place of their own. The Coalition estimates it can take nine to 10 years for an average household to save a deposit. But the new Scheme could see Aussies cut years off the time it takes to save for a home.
The First Home Loan Deposit Scheme will be targeted towards first home buyers earning up to $125,000 annually or $200,000 for couples. The value of homes that can be purchased under the Scheme will be determined on a regional basis, reflecting the different property markets across Australia.
The only catch? The First Home Loan Deposit Scheme doesn’t kick off until 1 January 2020. The upside is that this gives first home owners time to plan their property purchase.
Talk to your local Aussie Broker to see how you can take advantage of the Scheme.
Property investors
It’s no secret that the Labor party had proposed changes to negative gearing and capital gains tax as part of its policy agenda.
However, under the Coalition, negative gearing and CGT discounts will stay in place to help investors.
If you’ve been holding off buying an investment property out of concerns about possible changes to negative gearing, rest assured, for now it’s business as usual.
Speak with your Aussie Broker about a property investment loan that suits your goals.
Bank regulator recommends easing lending criteria
The good news keeps rolling on, with bank regulator APRA recently suggesting changes to the way banks assess home loan applications.
While this announcement isn’t a result of the election, it’s an important plus for home buyers including upgraders.
In a nutshell, APRA has proposed removing tough guidelines it introduced in 2014, which calls for lenders to assess whether a borrower can afford loan repayments using a minimum interest rate of at least 7%.
APRA has realised that 7% is far higher than today’s home loan rates, and is now suggesting a much lower rate buffer of 2.5% for checking loan serviceability.
According to CoreLogic, tighter lending criteria was one of the reasons behind the downturn in housing prices, and any sign that credit availability is improving is a plus for the housing market.
More importantly for home buyers, APRA’s recommendations could see more Aussies able to take out a home loan.
The wrap
Home buyers have plenty to celebrate – and we’re not just talking an end to all that election commentary.
Extra support for first home buyers, potentially an increase in credit for home buyers and today’s record low interest rates can all help you achieve your property goals.
It makes now the right time to speak with your Aussie Broker about the loan that’s right for your needs.
