First home buyers are set for a significant leg up with a new initiative from the Coalition to slash the size of a home loan deposit.
Prime Minister Scott Morrison today announced a plan with the aim of halving the time it takes to save for a deposit.
“It can take nine to 10 years for an average household to save a deposit. We want to help Australians realise the goal of buying their first home by cutting years off the time it takes to save up,” Mr Morrison said.
“Our plan for a stronger economy means we can help secure the future of tens of thousands of first home buyers.”
The First Home Loan Deposit Scheme will mean first home buyers won’t need to save for a full 20 per cent deposit, so Australians can get a loan and into the market faster. The Scheme will also help first home buyers save around $10,000 by not having to pay Lenders Mortgage Insurance.
.@ScottMorrisonMP: Our new first home loan deposit scheme will enable first home owners to buy their home with a deposit of down to 5%. This will make a big difference, cutting the time taken to save for a deposit by at least half and more
— Sky News Australia (@SkyNewsAust) May 12, 2019
The First Home Loan Deposit Scheme will be available to first home buyers who have been able to save for a deposit of at least five per cent.
“While our First Home Super Saver Scheme has been about helping boost the savings of first home buyers and making buying a house more affordable, the new First Home Loan Deposit Scheme will help people achieve their goals years earlier,” Mr Morrison said.
“We want to help make the dreams of first home buyers a reality.”
The First Home Loan Deposit Scheme, which will start on January 1 next year, will be targeted towards first home buyers earning up to $125,000 annually or $200,000 for couples. The value of homes that can be purchased under the Scheme will be determined on a regional basis, reflecting the different property markets across Australia.
The National Housing Finance and Investment Corporation will partner with private lenders to deliver the First Home Loan Deposit Scheme, prioritising smaller lenders to boost competition.