Singletons snap up Federal Government’s first home loan deposit scheme
Singletons are rushing to sign up to the First Home Loan Deposit Scheme, which has attracted thousands since being rolled out. Couples are benefiting too but are only taking 40 per cent of spots.
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Exclusive: Aspiring singletons looking to purchase property are the majority of nearly 7000 first time buyers who have rushed to sign up to the Federal Government’s First Home Loan Deposit Scheme.
The scheme rolled out on January 1 and is on track to quickly fill its 10,000 spots.
New National Housing Finance and Investment Corporation data showed they have already received 6730 applications and of those 60 per cent are single applicants, while 40 per cent are couples.
The average income of applicants is $67,100 for singles and $111,900 for couples.
Two major banks – the Commonwealth Bank and National Australia Bank – are the only big lenders able to offer loans via the scheme, as well as 25 smaller lenders.
The new figures showed of the applicants who have followed through and completed purchases 70 per cent were for houses, 25 per cent were for units or apartments and 5 per cent were for townhouses.
Minister for Housing and Assistant Treasurer Michael Sukkar said the scheme was helping Australians fast track being able to crack into the property market earlier.
“The Scheme is cutting years off the time it takes to secure a deposit, allowing Australians to realise their dreams of owning a home sooner,” he said.
“With a government-guaranteed loan buyers can get into the market with a deposit of as little as five per cent.”
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Jaclyn Thomas, 34, and her husband Byron, 40, recently purchased a four-bedroom home in Hillcrest, south of Brisbane, for $377,500 with just a five per cent deposit after applying with the Commonwealth Bank.
“We wanted to grab this opportunity because we have been looking to buy for the last five years and were struggling to make ends meet with buying,” she said.
“It meant we could finally buy a house for the first time.”
The scheme means borrowers with smaller deposits can escape expensive lenders’ mortgage insurance (LMI), a charge which usually costs thousands of dollars and protects the lender – not the borrower – if there is a default on the loan.
Already in the first two months more than 1000 applicants have followed through and purchased a property.
The Commonwealth Bank’s executive general manager of homebuyer Jason Chan said demand for the scheme has been “overwhelming”.
“While all CBA scheme places are currently reserved, customers should not be discouraged from applying as places may become available,” he said.
“With another 10,000 places made available in July, customers should speak to us about what options may be available to get them into their first home sooner.”
The National Housing Finance and Investment Corporation’s chief executive officer Nathan Dal Bon said they should still apply despite spots being snapped up fast.
“Additional spots should also come back online through the major banks given not everyone with a reserved place is likely to follow through to buying a home,” he said.
Mr Dal Bon said Australians with all different occupations had applied in the scheme including tradies, nurses, teachers, policemen, defence force personnel and firemen.