The federal government has announced that a new First Home Buyer Deposit Scheme will be in place, commencing on January 1st, 2020.
Applications for the Scheme are not yet open and there is no waitlist for people wanting to apply. Once the Scheme commences, applications will be lodged through participating lenders and their authorised representatives (we will guide you through this process). NHFIC will not accept applications directly.
The purpose of the scheme is the help first home buyers into their home sooner, as well as saving them a substantial amount of money due to the non-requirement of mortgage insurance. Essentially, you will provide the deposit of between 5% – 20%, and the bank will provide the remaining amount as a loan as per usual. The difference is that part of the loan is secured by a fund setup by the government, which means mortgage insurance is not applicable.
There are still some details missing regarding the application process for the scheme, although we will stay on top of this and provide further info to those who intend to apply. A summary of the qualifying criteria is as follows;
- All applicants must be over the age of 18 and must be an Australian Citizen
- Applicants could not have ever owned or had an interest in, a residential property anywhere in Australia (either individually, together, or with another person
- The property must be purchased as an individual, and must be a residential property in Australia
- You must be purchasing the property as an owner occupied property
- Your taxable income (within the meaning of the Income Tax Assessment Act 1997) assessed in your tax return in the preceding financial year must be below $125,000 as an individual, and $200,000 for a couple
- The property you intend to purchase must be at or below the specified price thresholds for the Scheme – You can use the NHFIC price threshold look up tool to enter the suburb or postcode of where you intend to purchase property to see the maximum price threshold for that location https://www.nhfic.gov.au/what-we-do/fhlds/eligibility/
- You must have demonstrated savings equivalent to at least 5 per cent and no more than 20 per cent of the assessed value of the residential property you intend to buy
- You pass the credit and lending checks by a participating lender – there are 27 lenders in total, including 2 Major Banks – NAB & CBA – we will guide you through this process
- A place must be available under the First Home Loan Deposit Scheme at the time the lender lodges your application with NHFIC. The Scheme is subject to a cap of 10,000 places each financial year
- The loan must be principal & interest, with the only exception being for land and construction
If you meet the criteria above, then you qualify for the scheme! To find out more information, feel free to give me a call. Alternatively, you can access the scheme website – www.nhfic.gov.au