This week’s tip is about how much deposit for a first home buyer is required by the banks. Last week, the government announced in the budget some extended schemes and some new schemes for those looking to enter the property market. This can make a big difference in terms of getting into your own home on a lower deposit.
If you’re borrowing more than 80% to buy your first home, the banks will generally charge you LMI, which is lenders mortgage insurance, and that can be quite a significant amount.
How much deposit for a first home buyer through the Home Guarantee Scheme?
The government has had a couple of schemes recently running, and they’ve extended those schemes and increased the number of allocations from 10,000 nationally per year to 35,000 per year.
It was previously known as the First Home Loan deposit scheme but has been reworded slightly and it’s for those looking to get into their own home and have a minimum deposit of 5%. So generally, at a 5% deposit, you would need to pay LMI, and you would have to have that LMI cost in addition to your actual cash deposit.
What the government is doing is guaranteeing the banks that they’ll cover that LMI figure, so you don’t have to pay it. It is quite a significant saving, and it can really help you get into the property market with a lower deposit.
How much deposit for a first home buyer through the Family Home Guarantee Scheme?
Single parents looking to enter or re-enter the property market will be able to buy with a deposit of just 2% via the Family Home Guarantee, which has been expanded from 10,000 places over four years to 5000 places each year.
What to do next……
If you are considering purchasing your first home, I would recommend speaking to your finance specialist and finding out if you qualify and what you need to do to get that deposit.
When you look at the recently increasing rents and the property market, now is really an important time to look at purchasing a property with prices going up and interest rates being at a historically low level, repayment figures even on increased property values are still relatively affordable.
If you need help with those finance structures, please reach out to us and we can recommend a great finance specialist that helps first home buyers. You can book a time to chat in my calendar by clicking here.
Regards,
Geoff Tomkins
Buyers Advocate
PH: 0404 852 781
