First home buyers are set to benefit from the government’s loan deposit scheme, which took effect on January 1, 2020.
The first home loan deposit scheme will be available to those first home buyers purchasing properties up to a maximum amount. The threshold will also depend on the property’s location. Eligible buyers on qualifying incomes can avail of up to 10,000 loans each financial year.
The highest property price cap is $700,000, which applies to properties in Sydney and regional centres of New South Wales including Wollongong and Newcastle. In other parts of the state, the maximum threshold is $450,000.
Victoria follows with a $600,000 cap on property prices, for the capital city and regional centres. The property price cap for the rest of the state is $375,000.
According to Finance Minister Mathias Cormann, they took into consideration the median house prices and stamp duty concessions in coming up with the price caps.
Housing Minister Michael Sukkar, for his part, revealed that only two of the four major banks will be taking part in the loan deposit scheme. Those banks have been identified as NAB and the Commonwealth Bank. 25 non-major smaller lenders will be rolling out guaranteed loans from February 1st.
The interest rates have yet to be decided, but all lenders have committed not to charge eligible customers higher interest rates than equivalent customers outside of the scheme.
There’s no set number of deposit guarantees per state but the government ensured that they will adjust to the demand. The same lending criteria will be implemented during the application process.
The home loan deposit scheme was first announced by Prime Minister Scott Morrison last May and was passed into law through Parliament early last month.
More details on the first announcement of the scheme can be found here in our previous blog post .
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By Wendy Chamberlain
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With a passion for all things real estate spanning over 20 years, Wendy loves that her role as a Buyers Agent and Sellers Advocate gives her buying and selling clients an experienced voice they can trust when it comes to negotiating to buy or sell something as important as their home or investment. Wendy considers it a privilege to be asked to help others realise such an important goal as home ownership and to be trusted with that honour. Get in touch today via www.wendychamberlain.com.au for a no obligation chat about how Wendy can work with you and help you save time and money to secure your new home sooner.