First home buyers hoping to make their first move into the property market this year, all while saving thousands of dollars, are being urged to take action, now.
The Morrison Government’s new First Home Loan Deposit Scheme opened for business on January 1 and allows borrowers with deposits as small as five percent apply for a mortgage. However, it’s only available to the first 10,000 successful applicants.
Twenty-seven lenders have been hand-picked to offer the special loans including two major financial institutions – the Commonwealth Bank and National Australia Bank.
This scheme enabled first-time buyers to have their fiver percent deposit saved, and the government will act as a guarantor for the remaining 15 percent. This means borrows will escape lenders mortgage insurance (LMI) – a fee that protects the lender not the borrower if there is a default on the loan. LMI applies when the deposit is less than 20 percent.
Interested Australians are urged to check their eligibility as From January 1, the big two banks – NAB and CBA – will begin offering 5000 loans under the scheme. And the smaller lenders will offer 5000 loans from February 1.
Key Points
- The scheme is available from January 1 with the two big banks and February 1 with the smaller lenders.
- It’s available to the first 10,000 successful applicants.
- Only owner-occupier, principal and interest applicants can apply.
- The income threshold is up to $125,000 for singles and $200,000 for couples which be assessed in the previous financial year.
- Property price thresholds apply in each state for capital cities and regional areas.