Commencing 1 January 2020, the Government are providing low to medium income earners a leg up towards their first home. With many struggling to find a sizeable deposit the scheme provides eligible Australians the opportunity to own their first home with a minimum deposit of just 5% of the property value.
Eligible buyers are exempt from paying Lenders Mortgage Insurance, instead the Government will guarantee the balance of the loan and cover the mortgage insurance.
Below is a summary of the details:
- The scheme is available to singles on a taxable income up to $125,000 and couples on a combined taxable income up to $200,000. Loans must be principal and interest, and they must be for owner-occupied property only.
- Eligible buyers can only access the scheme for properties valued up to a certain amount. These price thresholds vary according to location – the table below summarises these amounts:
- The capital city price caps will apply to large regional centres with a population in excess of 250,000, namely the Gold Coast, Newcastle and Lake Macquarie, the Sunshine Coast, Illawarra (Wollongong) and Geelong, recognising that dwellings in large regional centres tend to be significantly more expensive than other regional areas.
- There are only 10,000 loan guarantees available per financial year and they will go to the first 10,000 successful applicants.
- NAB and CBA are the only two big banks taking part in the scheme. The rest of the loans will be provided by smaller lenders including CUA, Australian Military Bank, MyState Bank and P&N Bank.
The Government’s intent is that eligible first home buyers will be able to save for their first home in half the time as a result of the scheme.
For more information on the new First Home Buyers Scheme or for a referral to a loan specialist, please contact your usual Mazars advisor or alternatively our finance consulting team on:
Published: 21 January 2020
Thanks to Smartline for content contribution.
Please note that this publication is intended to provide a general summary and should not be relied upon as a substitute for personal advice. Content is accurate as at the date published.
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