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Boost for first home buyers in 2022 Budget

The 2022 Federal Budget announcement had some great news for Australians looking to enter the housing market with the extension of the First Home Buyers Guarantee Scheme until June 2025. The Government has recognised one of the biggest barriers to getting onto the property ladder is saving the 20% deposit. On average it takes first home buyers eight years or more to save for a deposit. 

 

5% Deposit available to more first home buyers

 

You now require as little as 5% deposit to purchase a home. Eligible applicants no longer need to save a 20% deposit or take out lenders mortgage insurance (LMI) with the Home Guarantee Scheme expanded to 50,000 places per year until June 2025. 

  • 35,000 places will go to First Home Buyers looking to purchase a new or existing home.
  • Another 10,000 places will be available for both first-home buyers and previous homeowners in regional Australia. 
  • Final 5,000 places for single parents.

 

 

What you need to know

 

As of July 1st 2022 eligible First Home Buyers can purchase a home with as little as 5% deposit, with the Government providing a guarantee for the buyer to 15% of the purchase price, waiving the need for expensive mortgage insurance.

For instance, if you are looking at purchasing a home for $500,000 you only require a 5% deposit or $25,000 compared to $100,000 with a 20% deposit. The new scheme means the government will step in and guarantee the remaining $75,000 of your loan, excluding government fees like stamp duty. 

There will be some eligibility criteria but what we know previously is: 

  • There are thresholds on the value of the property, likely up to $700,000.
  • There are restrictions on the type of property you can purchase. The great news is off-the-plan apartments, townhouses and House and Land packages are included.
  • There are caps on the amount that you earn. For singles, that is a taxable income of up to $125,000 per annum for the previous financial year, and couples with an income of up to $200,000.

 

How we can help

 

Our iBuyNew property experts can discuss the eligibility criteria and how to apply for the scheme when it is released by the Government in the coming weeks. We are experts in helping first home buyers find their dream home when looking for off- the- plan apartments or townhouses.

 

Call 1300 123 463 to start exploring your property options and what the scheme means for you.

Published on 30th of March 2022 by Jen Dickson
Jen Dickson
Jen Dickson

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