Last night’s Federal Budget had some great news for Australians looking to enter the housing market with the extension of the First Home Buyers Guarantee Scheme until June 2025. The Government has recognised one of the biggest barriers to getting onto the property ladder is saving the 20% deposit. On average it takes first home buyers eight years or more to save for a deposit.
5% Deposit available to more first home buyers
You now require as little as 5% deposit to purchase a home. Eligible applicants no longer need to save a 20% deposit or take out lenders mortgage insurance (LMI) with the Home Guarantee Scheme expanded to 50,000 places per year until June 2025.
- 35,000 places will go to First Home Buyers looking to purchase a new or existing home.
- Another 10,000 places will be available for both first-home buyers and previous homeowners in regional Australia.
- Final 5,000 places for single parents.
What you need to know
As of July 1st 2022 eligible First Home Buyers can purchase a home with as little as 5% deposit, with the Government providing a guarantee for the buyer to 15% of the purchase price, waiving the need for expensive mortgage insurance.
For instance, if you are looking at purchasing a home for $500,000 you only require a 5% deposit or $25,000 compared to $100,000. The new scheme means the government will step in and guarantee the remaining $75,000 of your loan, excluding government fees like stamp duty.
There will be some eligibility criteria but what we know previously is:
- There are thresholds on the value of the property, likely up to $700,000.
- There are restrictions on the type of property you can purchase. The great news is land and a separate contract to build a new home and House & Land packages are included.
- There are caps on the amount that you earn. For singles, that is a taxable income of up to $125,000 per annum for the previous financial year, and couples with an income of up to $200,000.
How we can help
Our iBuildNew New Home Advisors can discuss the eligibility criteria and how to apply for the scheme when it is released by the Government in the coming weeks. We are experts in helping first home buyers find their dream new home.
Call 1800 184 284 or book a call online to start exploring your new home property options and what the scheme means for you.
Let us do the legwork for you.
- We’ll ask the right questions to better understand your needs
- We’ll create a recommended shortlist ideally matched to you
- We’ll answer specific questions or concerns related to home building, land purchasing or financing
1800 184 284
