The First Home Loan Deposit Scheme is a government-backed initiative that aims to help first-home buyers get into the property market by providing assistance in the form of a deposit guarantee. If you’re a first home buyer in Australia, here are the things you need to know about the First Home Loan Deposit Scheme.
1. Eligibility Criteria
To be eligible for the First Home Loan Deposit Scheme, you need to meet a few criteria. Firstly, you must be a first home buyer, which means you have not owned a property in Australia before. Secondly, you need to be an Australian citizen or a permanent resident. Thirdly, you must be at least 18 years old, and lastly, your taxable income must be less than $125,000 per annum if you’re single or less than $200,000 per annum if you’re a couple.
2. Property Value
The First Home Loan Deposit Scheme has a maximum property value limit, which varies depending on the location of the property. In metropolitan areas, the limit is $700,000, while in regional areas, it is $450,000. If the property value exceeds the limit, you will not be eligible for the scheme.
3. Deposit Requirement
Under the First Home Loan Deposit Scheme, you only need to provide a deposit of 5% of the property value, and the government guarantees the remaining 15% of the deposit. This means you can avoid the need to save for a 20% deposit, which is usually required when applying for a home loan.
4. Lender Options
There are a limited number of lenders that participate in the First Home Loan Deposit Scheme. At present, 27 lenders have been approved to offer the scheme. You should research the different lenders and compare their interest rates, fees and charges, and loan features to find the best option for your circumstances.
5. Repayment Obligations
While the First Home Loan Deposit Scheme can make it easier to get into the property market, you still need to make regular loan repayments like any other home loan. It’s essential to budget for these repayments and ensure you can afford them, especially as interest rates may rise in the future.
In conclusion, the First Home Loan Deposit Scheme can be an excellent option for first-home buyers who are struggling to save for a 20% deposit. However, it’s essential to understand the eligibility criteria, property value limits, deposit requirements, lender options, and repayment obligations to make an informed decision. If you’re considering applying for the scheme, it’s a good idea to speak to a mortgage broker or financial advisor who can guide you through the process and help you find the best loan option for your needs.
If you are a first-time home buyer in Australia, you should also be aware of other government initiatives such as the First Home Owner Grant and stamp duty concessions that may be available in your state or territory.
These programs can help reduce the costs associated with buying a property and make it more affordable for you to enter the property market.
6. How to apply?
To apply for the FHLDS, you need to apply through a participating lender. You can find a list of participating lenders on the National Housing Finance and Investment Corporation (NHFIC) website. Once you’ve found a lender, you’ll need to apply for pre-approval for a home loan, and then apply for the FHLDS through the lender.
In summary, the First Home Loan Deposit Scheme is a government-backed initiative designed to help first-home buyers get into the property market by providing assistance in the form of a deposit guarantee. To be eligible, you must meet specific criteria, including being a first home buyer, an Australian citizen or permanent resident, and meeting income thresholds.
The scheme has a maximum property value limit, and you only need to provide a deposit of 5% of the property value. There are a limited number of lenders offering the scheme, and it’s important to understand the repayment obligations associated with the loan. By understanding these key factors, you can determine whether the First Home Loan Deposit Scheme is the right option for you.
