Attention first home Buyers! How a 5% deposit can get you a slice of the property pie
By Erlinda Nunn
At the recent Federal Election, Prime Minister Scott Morrison announced the introduction of the First Home Loan Deposit Scheme which will allow first home buyers break into the property market with as little as a 5% deposit of the value of a home. The scheme also looks to scrap the requirement of Lenders Mortgage Insurance (LMI).
If you’re thinking of buying your first home in the New Year, you’ll need to get in quick as this Scheme will be offered on a ‘first in, best dressed’ basis.
This Scheme will be available to:-
- Only the first 10,000 first home buyers around Australia;
- Singles who earn less than $125,000.00 annually; or
- Couples who earn less than $200,000.00 combined annually.
This Scheme can also be used in conjunction with the First Home Super Saver Scheme. The Super Saver Scheme allows home buyers to withdraw voluntary superannuation contributions they have made to their super fund, and to put this money towards a deposit on a property. For example, you can withdraw from your superfund if you have made voluntary super contributions of up to $15,000 per financial year and take advantage of the 5% deposit Scheme. The limit you can withdraw is $30,000 for singles and $60,000 for couples.
The Scheme also sets out to put a ‘cap’ on the value of the property. A statement released on the Liberal Party’s website said “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”. You will need to check the property price cap in your area:
|
State/Territory |
Capital City and Regional Centres |
Rest of State |
|
NSW |
$700,000.00 |
$450,000.00 |
|
VIC |
$600,000.00 |
$375,000.00 |
|
QLD |
$475,000.00 |
$400,000.00 |
|
WA |
$400,000.00 |
$300,000.00 |
|
SA |
$400,000.00 |
$250,000.00 |
|
TAS |
$400,000.00 |
$300,000.00 |
|
ACT |
$500,000.00 |
- |
|
NT |
$375,000.00 |
- |
Applications are now open and can be made online through the National Housing Finance and Investment Corporation. You can visit https://www.nhfic.gov.au/what-we-do/fhlds/how-to-apply/ to find out how to apply.
The major bank lenders which will be opening applications for the First Home Loan Deposit Scheme, include the National Australia Bank and the Commonwealth Bank of Australia. You can access the following link for a full list of non-major lenders participating in the scheme here.