There were a range of measures introduced in the 2021 Federal budget this week to help with home ownership.
Here is a quick high-level overview:
1. An extra 10,000 places in the First home Loan Deposit Scheme (New homes)
The Government announced an additional 10,000 FHLDS places for the 2020-21 financial year, specifically for eligible first home buyers building or purchasing new homes. These additional places are known as the First Home Loan Deposit Scheme (New Homes) or FHLDS (New Homes).
The First Home Loan Deposit Scheme (FHLDS) is an Australian Government initiative to support eligible first home buyers to build or purchase a first home sooner.
Usually, first home buyers with less than a 20 per cent deposit need to pay lenders mortgage insurance. Under the Scheme, eligible first home buyers can purchase or build a new home with a deposit of as little as 5 per cent (lenders criteria apply). This is because the scheme guarantees to a participating lender up to 15 percent of the value of the property purchased that is financed by an eligible first home buyer’s home loan.
As the name suggests, it only applies to new homes so keep this in mind as you search for your first property.
Can you save on your home loan?
2. New Family Home Guarantee Scheme
This is scheme allows single parents with children to purchase a property with only a 2% deposit.
The government will guarantee up to a maximum of 18 per cent of the property purchase price, allowing the applicant to get a loan without paying lender’s mortgage insurance. That’s a really big saving and a great opportunity for many to buy a new home.
From 1 July 2021, 10,000 Family Home Guarantees will be made available over four financial years.
Applicants must be Australian citizens, at least 18 years of age and have an annual taxable income of no more than $125,000.
Find out more about these first two schemes at the Federal government website.
3. First Home Super Saver Scheme cap limit change
The First Home Super Saver Scheme allows eligible first home buyers to release voluntary super contributions to put towards a house deposit.
The government has increased the maximum amount of voluntary contributions that can be released under the First Home Super Saver Scheme, from $30,000 to $50,000.
More details here.
Of course, if you have any questions related to these programs, please contact us.
Yohan is a director of Loan Comparison Genius (Credit representative number 528539 under Australian Credit Licence 384704).