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October 6, 2020
Good news for first home buyers!
It was announced in this year’s federal Budget handed down by Treasurer Josh Frydenberg on Tuesday night that the First Home Loan Deposit scheme will be extended.
The scheme allows first home buyers to get into the market with a deposit as low as 5 per cent while avoiding lenders’ mortgage insurance, with the federal government acting as guarantor on the loans.
The expanded scheme will be available to an extra 10,000 first home buyers this financial year with property price caps for new homes also lifted.
Mr Frydenberg said: “This builds on the 20,000 first home buyers we are helping to purchase a home this year.”
The measure is set to stimulate activity in housing construction and is estimated to generate an additional $800 million in economic activity.
Extended First Home Loan Deposit Scheme Price Caps
State/Territory | Capital City/Regional Centre | Rest of State |
NSW | $950,000 | $600,000 |
VIC | $850,000 | $550,000 |
QLD | $650,000 | $500,000 |
WA | $550,000 | $400,000 |
SA | $550,000 | $400,000 |
TAS | $550,000 | $400,000 |
ACT | $600,000 | N/A |
NT | $550,000 | N/A |
Previously Sydney first home buyers needed to buy properties costing less than $700,000 and up to $450,000 for the rest of the state to be eligible to buy under the scheme.
The First Home Loan Deposit Scheme complements the government’s recent overhaul of the responsible lending laws, reducing the regulatory burden on lenders and borrowers. The reforms will reduce the time it takes to apply for credit and simplify the application process, unlocking housing demand.
Overall, the scheme is anticipated to give first home owners a better opportunity of getting into new property at an affordable price, which will especially appeal to younger demographics. Experts also predict that property activity for the remainder of the year will be stronger than it was pre-COVID.
To learn more about the First Home Loan Deposit Scheme visit: https://www.nhfic.gov.au/what-we-do/fhlds/
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