New boost for first homeowners grant

Thousands more first homeowners will have access to loans with deposits as low as 5 per cent, while those who purchase a new property before the end of the year can cash in a $25,000 grant. This is what you need to know.

Up to 10,000 extra first homeowners will have access to loans with deposits as low as 5 per cent under a scheme designed to boost the struggling construction industry.

Treasurer Josh Frydenberg said the extension to the first home loan deposit scheme, to be announced today, would be open to anyone building or buying a newly built home.

Homebuilder grant now available for first homebuyers to use on their deposit

First home buyers who purchase a new property before the end of the year can also cash in a $25,000 grant.

“Helping another 10,000 first homebuyers to buy a new home through our first home loan deposit scheme will help to support all our tradies right through the supply chain including painters, builders, plumbers and electricians,” he said.

“At around 5 per cent of GDP, our residential construction industry is vital to the economy and our recovery from the coronavirus crisis.

“In addition to the Government’s HomeBuilder program, these measures will support residential construction activity and jobs across the industry at a time when the economy and the sector needs it most.”

The scheme, which started in January this year, allows first homeowners to buy a property with a deposit as low as 5 per cent without needing to pay mortgage insurance, which is usually applied on deposits less than 20 per cent.

Under the extension, price caps for the scheme have also been increased to account for the relative expense of purchasing a new home.

In Brisbane and regional centres in Queensland, first homeowners will have access to the scheme on loans up to $650,000 – up from $475,000.

In the rest of the state, the cap will jump to $500,000 from $400,000.

The new loans will be available from October 6 until June 30 next year.

Assistant Treasurer and Housing Minister Michael Sukkar said the scheme had already helped 20,000 first homebuyers purchase a house.

“The Morrison government is committed to doing all we can to help Australians get into their own home,” he said.

“The additional grants will not only help first homebuyers but also support the jobs of Australia’s tradies at a time when the economy needs it most. Between March and June this year, the scheme supported one in every eight first homebuyers.