The First Home Loan Deposit Scheme is an Australian Government initiative that started in January 2020. The initiative is designed to support eligible first home buyers purchase their first home sooner.
There is a limited number of allocations available. 10,000 First Home Loan Deposit Scheme places will be available to eligible first home buyers from 1 July 2021 to 30 June 2022.
Eligible applicants will avoid paying lenders mortgage insurance.
What is Lenders Mortgage Insurance?
This type of insurance is usually payable by the borrower when purchasing a new home with less than a 20% deposit.
Lenders Mortgage Insurance is designed to protect the lender. It ensures the lender is covered if the borrower was unable to meet the loan repayments and the net proceeds from an enforced sale was not enough to cover the loan.
Under this Scheme, part of an eligible first home buyer’s home loan from a Participating Lender will be guaranteed by NHFIC. This allows first home buyers to get into their own home sooner with as little as a 5% deposit without paying Lenders Mortgage Insurance.
Any guarantee of your home loan is for up to a maximum amount of 15% of the value of your property (as assessed by your lender). This guarantee is not a cash payment or a deposit for your home loan.
Who is eligible?
The First Home Low Deposit Scheme is available to Australian Citizens who are First Home Buyers. Applicants must be over 18 years of age and have a taxable income of up to $125,000 per annum for the previous financial year and couples with a taxable income of up to $200,000 per annum for the previous financial year.
A fact sheet with further information on eligibility criteria is available on the Government Website at https://www.nhfic.gov.au/
We can help!
Under this scheme you avoid the cost of Lenders Mortgage Insurance and may be able to get into your own home sooner than you think! Contact us or complete our free assessment form to explore your options!