20 November 2019
First Home Buyer's Update
2020 is shaping up to be a great year for First Home Buyers!
5% Deposit Scheme
The Federal Government’s First Home Loan Deposit Scheme, due to launch on 1 January 2020, is designed to help eligible Australian First Home Buyers with deposits as low as 5% to get a loan, without needing to pay for lenders' mortgage insurance (LMI). Original story here.
WHAT IS IT?
The First Home Loan Deposit Scheme is a government guarantee which will secure the mortgages of some eligible first home buyers with deposits as low as 5% who otherwise might not be able to get a loan without paying LMI. The government will essentially act as a guarantor, securing the remaining deposit to bring the borrower up to 20%.
An eligible borrower with a 5% deposit would still be borrowing and have to pay back the other 95%, plus interest, to their lender. However, the scheme means that eligible borrowers could get a loan faster and would avoid having to pay for lenders’ mortgage insurance which is usually required on loans taken out with a deposit below 20%.
WHO IS ELIGIBLE?
First home buyers with an income of up to $125,000 will be eligible to apply for the scheme, according to the government’s plan. For couples, the income limit will be a combined $200,000, and the scheme will only be available where both partners are first home buyers.
The guarantee will be limited to 10,000 first home buyers each year – less than 10% of the total number of first homes purchased in Australia in 2018.
According to Finance Minister, Mathias Cormann, the scheme will operate on a “first in, best dressed” basis, with “no specific number of guarantees per jurisdiction”.
WHAT SHOULD YOU DO?
Come in and meet with our independent broker and see how much you can borrow. Martin, from Buyer's Choice, will help set you up on a savings plan and get you ready to apply first up in 2020. With only 10,000 available, you'll need to be ready to go.
First Home Buyer's Grant
Queenslander's come out on top when buying their first home. The Government is still continuing the $15,000 First Home Buyer's grant and stamp duty concessions for those buying new or significantly renovated homes in Queensland. This is the second highest grant in the country, so we are really getting a good deal! You can find out more on their website and if you've got any questions, we'd love to help you.
Brisbane City Council have made owning your first home just that bit easier. They recently announced that First Home Buyers will get 50% off their rates for the first year!