Article by Michelle Leftwich
Despite recent COVID-19 lockdown, first home buyers have been out in force (and more recently online) looking to take advantage of the Government’s First Home Loan Deposit Scheme and lower house prices. The first few months of the scheme has proved to be popular with first-time buyers who have remained active during the Covid-19 lockdown. So much so that the 10,000 places made available to eligible buyers from the beginning of January this year have now been reserved. This comes one month out from the June 30 deadline. Source
The Government announced early April that those who had been approved just prior to the lockdowns but were unable to secure a contract of sale during lockdown have been given a 90-day extension to secure contracts. While places for the 19/20 financial year may still become available between now and the deadline should current reservations fall through.
10,000 new places will be available for eligible first homebuyers to apply for in the new financial year as of July 1, 2020.
The scheme was brought in on January 1 this year by the Morrison Government with a view to aiding first-time buyers struggling to get into the property market with less than a 20% deposit. Borrowers not able to pay at least a 20% deposit are required to take out Mortgage insurance, which intern increases the amount needing to be borrowed. The scheme, which has proved to be extremely popular, allows eligible first home buyers to buy their first property with as little as 5% deposit. The remaining 15% of the loan value is guaranteed to participating lenders by the scheme.
There is a range of eligibility criteria for the Scheme that covers:
Read more on the scheme in our article, What is the First Home Loan Deposit Scheme. Want to know if you'd be eligible to apply? Use the Government's online interactive eligibility tool to better understand whether you may be eligible to apply for the 20/21 intake of the scheme.