Do you know if you're eligible for the Government's First Home Buyer Deposit Scheme? Available to 10,000 more applicants from 1 July 2020. Find out more.
As of 1 July 2020, many first time home buyers in Australia will be able to break into the property market with a reduced deposit thanks to the second intake of the Government’s First Home Buyer Deposit Scheme. This scheme enables first time home buyers to pay just a 5% deposit on a property with the Government providing banks with a guarantee of up to 15% of the property’s value.
This scheme means that first time home buyers will be able to avoid paying Lenders Mortgage Insurance (LMI). Additionally, the scheme helps to reduce the burden of having to pay a large sum up front in order to break into the housing market.
However, this also means that people taking advantage of the scheme will be borrowing more from their bank, meaning that the eventual cost will likely be more expensive than paying a higher deposit initially.
The scheme was first made available to 10,000 recipients at the beginning of the year and, as of 1 July, is open to another 10,000 recipients. However, as advantageous as the scheme is, approximately 80% of first home buyers are unsure what the scheme entails and whether they are eligible to apply for it. This is likely because first time buyers are faced with an overwhelming amount of information regarding state and federal schemes, and are unable to wade through the various eligibility requirements.
Many people are unsure whether they’re eligible for the First Home Buyer Deposit Scheme. The eligibility requirements for the scheme include:
Additionally, there are eligibility requirements regarding the types of properties able to be purchased with the scheme. This includes:
For applicants who are intending to purchase vacant land to construct a dwelling upon, a building contract must be entered within six months of the loan settlement date.
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