On 1 January this year, the Federal Government launched the First Home Loan Deposit Scheme, which opened the door to the property market for thousands of hopeful first home buyers.
Having already helped nearly 20,000 Australians purchase their first home, the government announced on 3 October that the scheme is being extended and expanded to offer an additional 10,000 grants.
This exciting announcement means 10,000 more Australians will be able to purchase their dream first home sooner than expected, taking full advantage of low property prices and less building activity.
How will it work?
Just like when the scheme was first launched, first home buyers will be able to secure a home loan with a deposit as little as 5% thanks to the Federal Government guaranteeing up to 15% of the value of their new home. This saves first home buyers from the dreaded Lenders Mortgage Insurance (LMI) that is normally required on home loans with a small 5% deposit.
The scheme, which was originally limited to 10,000 loans each year over 2020 and 2021 on a first-in, best-dressed basis has now been extended, offering an additional 10,000 loans. These first home buyers can enter the scheme from 6 October 2020 until 30 June 2021.
The difference between these additional 10,000 places is that they are only eligible to first home buyers buying off the plan or purchasing a newly built home. Whilst adding this restriction designed to stimulate the new-home industry, the Government has also raised the price caps for the grants.
In Melbourne and regional centres, the maximum price for an eligible home has been raised from $600,000 to $850,000 and $375,000 to $550,000 for the rest of Victoria. Every state has seen a similar rise in the price cap, making this an even more gainful opportunity for those looking to purchase their first home.
Who is eligible?
To be eligible for the First Home Loan Deposit scheme, first home buyers must work with one of the 27 lenders who are taking part, comprised of the ‘big four’ banks and 25 smaller lenders. Since the announcement, Commonwealth Bank have released a statement from Angus Sullivan, the Group Executive for Retail Banking Services, applauding the extension, stating that the “feedback from our customers who have benefitted from this scheme has been extremely positive”.
If eligible, the First Home Loan Deposit Scheme can operate in conjunction with the HomeBuilder Grant or any other government grant.
What are you waiting for?
If you are a first home buyer that is eager to purchase a modern, newly built or off the plan home then the government’s announcement might just be your fast-tracked ticket into the property market.
The Homeshelf team is equipped with the knowledge and expertise to connect you with the perfect plan or builder suited to what you’re looking for. Don’t miss out on your spot in the scheme, as the grants are allocated to the earliest applicants! Enquire for free with us today and start imagining your dream home of tomorrow.