First Home Loan Deposit Scheme Explained
First Home Loan Deposit Scheme Explained
What is the First Home Loan Deposit Scheme?
The First Home Loan Deposit Scheme (FHLDS) is an initiative launched by the Australian Government in 2020 to help first home buyers purchase their first home sooner. The scheme provides eligible first home buyers with a government guarantee on their home loan so they only need to have a deposit of 5% of the purchase price. This means they don’t have to save a 20% deposit, which is typically required by most lenders.
Who is Eligible for the Scheme?
The scheme is available to eligible first home buyers who meet the following criteria:
- You are an Australian citizen or permanent resident.
- You are 18 years or older.
- You are buying a property for the first time.
- Your income is below a certain threshold.
- You are buying a property within the price cap limits.
How Does the Scheme Work?
The scheme works by providing eligible first home buyers with a government guarantee on their home loan. This means that the government will guarantee up to 15% of the loan amount, allowing the first home buyer to only need a 5% deposit. This guarantee is provided to eligible lenders, who then use it to offer loans to eligible first home buyers.
What is the Price Cap for the Scheme?
The price cap for the scheme varies depending on the location of the property. The maximum purchase price for properties located in metro areas is $700,000, while the maximum purchase price for properties located in regional areas is $450,000.
How Do I Apply for the Scheme?
To apply for the scheme, you will need to contact an eligible lender who is able to offer loans under the scheme. You will then need to provide the lender with evidence of your eligibility, such as proof of your income or proof of your Australian citizenship or permanent residency. Once your eligibility has been confirmed, the lender will assess your suitability for the loan.
What are the Benefits of the Scheme?
The main benefit of the scheme is that it allows first home buyers to purchase their first home with only a 5% deposit, which is much lower than the typical 20% deposit that is usually required. This means that first home buyers can purchase their first home sooner, as they don’t need to save as much for a deposit.
Conclusion
The First Home Loan Deposit Scheme is a great initiative by the Australian Government to help first home buyers purchase their first home sooner. The scheme provides eligible first home buyers with a government guarantee on their home loan, allowing them to only need a 5% deposit, rather than the typical 20% deposit that is usually required. If you think you may be eligible for the scheme, then contact an eligible lender to find out more.
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