Planning to buy your first home in Australia? There's some good news for first home buyers.
As part of the 2020-21 Federal Budget, the Australian Government has committed an additional 10,000 First Home Loan Deposit Scheme (FHLDS) places for the 2020-21 financial year.
Highlights:
- Additional 10,000 First Home Loan Deposit Scheme (FHLDS) places committed for 2020-21
- Eligible first home buyers can purchase a modest home with a deposit with as little as 5 percent
- There are some other schemes that can benefit those wishing to invest in the property market.
Under the existing First Home Loan Deposit Scheme, eligible first home buyers can purchase a modest home with a deposit of as little as 5 per cent.
Now, an additional 10,000 first home buyers will be able to obtain a loan to build a new home or purchase a newly built home with a deposit of as little as 5 per cent.
The additional guarantees will be available until 30 June 2021.
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Navjit Singh Matta, a financial adviser and a mortgage broker in Sydney, says this scheme has been announced as part of government's Economic Recovery Plan to drive more construction and support jobs.
He says this will help people who are looking to buy their first home with a small deposit.
"Earlier, to take a loan for your house, you had to pay 20 per cent of the price of the house, only then the bank waived off the lender's mortgage insurance payment.
"But now people can avoid the insurance premium by paying 5% of the price of the house while The National Housing Finance and Investment Corporation (NHFIC) guarantees the remaining 15 per cent of the value of the property to a participating lender, ” Mr Matta explained.
However, Navjeet makes it clear that this scheme is available only to Australian citizens.
Navjit says that those who invest in the property market can also take advantage of some of the already existing schemes such as the First Home Owner Grant Scheme, in which the first home buyers can get a grant of $10,000 and the Home Builder Grant Scheme, where a homeowner can get a grant of up to $25,000 for renovation.
Disclaimer: We’d like to point out that the information contained in this segment is general and is not specific advice. If you would like accurate information relevant to your situation, you should consult a registered financial planner.
