First Home Loan Deposit Scheme: Updated Information

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Starting January 2020, there is a way that first home buyers can have a deposit of just 5 per cent – and have the Federal Government as the guarantor for the remaining 15 percent. Additionally- No Lenders Mortgage Insurance!

The new First Home Loan Deposit Scheme will assist 10,000 first home buyers into purchasing a home sooner. This week, the government has officially launched the initiative to help first time buyers on low and middle incomes enter the market.

Since starting on 1 January, the banks have registered 3,000 potential first home buyers under the First Home Loan Deposit Scheme.

The remaining 7,000 Scheme places for the current financial year will be available from 1 February 2020 when potential applicants will have a panel of 27 lenders to choose from.

NHFIC is releasing 10,000 First Home Loan Deposit Scheme guarantees this financial year. Another 10,000 places will be available from July 2020.

The staged release of Scheme places provides first home buyers with the opportunity to gather the necessary financial information to support their application and enables a broader choice between the major banks and smaller lenders. Twenty-five smaller lenders join the Scheme’s lending panel on 1 February.

Townsville locals would only need a 5 percent deposit — instead of the usual standard of around 20 per cent with a price cap of $400,000.

Usually the biggest hurdle for First Time Buyers is saving the large deposit necessary to buying when also paying rent.

This scheme speeds up first time buyers’ saving time and eliminates the need to pay lenders mortgage insurance, which protects banks from defaults and often costs borrowers about $10,000.

The program would be available to first home buyers with an income of up to $125,000 or couples with a joint income of up to $200,000.

All of the normal credit checks on the borrowers will still take place to ensure serviceability of the loan amount. However, reaching a goal of 5% of a house and land price is much more attainable. Particularly for low- and middle-income earners, this will be a great assistance. It is not free money. It is just making entry into the market a little easier- and then you off as a homeowner paying your own mortgage instead of your landlord’s.

Many people can easily afford a the weekly repayments of a mortgage but have struggled to save enough for a deposit while also paying rent.

This is a fantastic opportunity for First Time Buyers to get into the market and buy their first home.

Are you eligible? The full details of the scheme have yet to be released. Here is what we know so far:

  • Single people earning up to $125,000 OR couples earning up to $200,000 will be eligible

  • Saved 5% of the value of the home

  • There will likely be regional caps on the value of homes for which it will guarantee a deposit

  • The scheme availability is limited to 10,000 homebuyers

  • Take the online test HERE to see if you’re eligible

Currently, only NAB and Commonwealth Bank are offering guaranteed loans from 1 January 2020. However, in February 2020, 25 non-major lenders will begin offering guaranteed loans. To view a list of the other 25 lenders click here.

Do you have home ownership in your scopes? Contact the team at Ellis Developments to learn more about options, process, and availability. Owning your own home is closer than you think. We are here to help. View a few of our eligible properties below.

The Terrace
Lot 1112 Holyoak Ave, The Village
2 Bedroom, 1 bathroom, 1 car garage
$285,500 House & Land Package
$14,275 Deposit Needed
Click here for more

The Hybrid
Lot 129b Castleview Lane, Haven
3 Bedroom, 2 bathroom, 2 car garage
$359,500 House & Land Package
$17,975 Deposit Needed
Click for more

The Aries
Lot 739 Colvin Street, The Village
3 Bedroom, 2 bathroom, 1 car garage
$357,500 House & Land Package
$17,875 Deposit Needed
Click here for more

The Entertainer
Lot 14 Castleview Lane, Haven
4 Bedroom, 2 bathroom, 2 car garage
$399,500 House & Land Package
$19,975 Deposit Needed
Click for more

The Pavilion
Lot 1120 Colvin Street, The Village
4 Bedroom, 2 bathroom, 2 car garage
$399,500 House & Land Package
$19,975 Deposit Needed
Click to view more