Unpacking the new First Home Loan Deposit Scheme
The Federal Government has released further information on its new First Home Loan Deposit Scheme, due to hit the market in January 2020, with another bump in July when the new financial year kicks in. The scheme was originally announced prior to the Federal Election in May, but few details were given at the time.
What does the First Home Loan Deposit Scheme entail?
The scheme offers 10,000 eligible first home buyers the opportunity to take out a mortgage with as little as a 5 per cent deposit, without the need to have lenders mortgage insurance. Essentially the Federal Government will be guarantor on the loans. The arrangement comes with price caps for each capital city as well as regional areas, with Melbourne capping the properties at $600,000, and $375,000 for the rest of the state.
Expect an influx of first home buyers at entry level
It might seem like a drop in the ocean given that there are around 110,000 first home buyers in the market (Australian Financial Review), but experts predict that the influx of sales in entry level properties is likely to push up the value of this sector. Another thing to note is that first home buyers will be bidding against potential investors sitting within the same price bracket – which will be one- and two-bedroom apartments, and homes in the outer ring suburbs.
If you’re in the market to buy or sell, reach out to one of our hockingstuart experts today.