FHB’s crack market sooner thanks to schemes

We love a feel-good news story and hearing thousands of first home buyers got a leg up into the property market makes us feel pretty warm and fuzzy.

Recent government figures show almost 33,000 Australians bought their first home four years sooner thanks to the popular First Home Loan Deposit Scheme (FHLDS) and New Home Guarantee (NHG) initiatives.

Hold up, what are these first home buyer schemes?
The FHLDS allows eligible FHB’s with only a 5% deposit (rather than the typical 20% deposit) to purchase a property without forking out for lenders mortgage insurance (LMI).

This is because the government guarantees (to a participating lender) up to 15% of the value of the property purchased.

Not paying LMI can save buyers anywhere between $4,000 and $35,000, depending on the property price and deposit amount.

The NHG scheme is very similar but is only for new builds, such as house and land purchases or a land purchase with a contract to build.

Another key difference is that the NHG property price caps are higher to account for the extra expenses associated with building a new home.

So who’s using the schemes?
According to the latest stats, 58% of all buyers under the schemes are aged under 30-years-old.

NSW (11,000 residents) and Queensland (9,000 residents) make up nearly two-thirds of the scheme’s recipients.

And it turns out that most FHB’s who secured a spot in one of the schemes used a mortgage broker (56%).

But for the NHG scheme specifically, brokers originated the vast majority of government guarantees (72%).

Securing a spot

The FHLDS is an annual scheme with new spots expected to be available each financial year.

So if any of the above schemes are of interest to you, get in touch with us today and we can run you through everything you need to know about them so that you’re ready to apply when the time comes.