First home buyers are leaping into the market thanks to the help of the Federal Government’s new scheme
Many aspiring first-home buyers have struggled to crack into the property market but it’s just become a little easier thanks to a new federal government scheme. Here’s how it can help you.
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Aspiring first-home owner Philip Reuter said he had virtually given up on his dream to own his own home.
The 39-year-old and his fiancee, Christine South, 25, who both work as high school teachers said affording their own property seemed too far-fetched.
“I’ve been trying to get a deposit for years and it seemed unrealistic to buy a house because I’d been moving jobs,” he said.
“But we’ve settled down now and managed to save $50,000 in just 12 months.”
The couple earn a combined salary of $140,000 and are looking to buy a property in Campbelltown, in Sydney’s west.
The rollout of the Federal Government’s First Home Loan Deposit Scheme on January 1 changed everything for them, enabling them to finally be able to buy, Mr Reuter said.
Under the scheme, borrowers only need a deposit of 5 per cent and the Government gives them a special guarantee that allows them to avoid the expensive lenders’ mortgage insurance.
Borrowers who don’t have a 20 per cent deposit typically have to pay LMI, which can cost thousands of dollars.
The first 3000 spots on the scheme were offered by the Commonwealth Bank and National Australia Bank from January 1 and filled within a couple of weeks.
Another 7000 became available from February 1 including 2000 spots with the big two banks and another 5000 on offer by 25 smaller lenders.
Mr Reuter has registered his interest with G&C Mutual Bank, which is part of the scheme, and he hopes to buy a property in the $600,000 range.
“This has allowed us to buy a home at least one or two years sooner,” he said.
G&C Mutual Bank CEO Dave Taylor said it had already seen hundreds of people express interest.
“We are having very strong demand and if people want to get access to this they need to apply very quickly,” he said.
“Applicants need evidence of their income, an indication of the property they want to buy and evidence a 5 per cent deposit to be eligible for the scheme.”
The Commonwealth Bank’s general manager of homebuyer, Jason Chan, said it was “overwhelmed by the response from first-home buyers who applied for the scheme in January”.
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National Housing Finance and Investment Corporation chief executive officer Nathan dal Bon said hopeful applicants should be aware more spots would become available mid-year.
“Given the scheme runs on a financial year, a further 10,000 places will be available from July,” he said.