The First Home Loan Deposit Scheme is a new federal government initiative that commenced on 1 January 2020. Up to 10,000 eligible first home buyers in Australia can apply for the Scheme each year.
The cost of LMI varies depending on the lender, the deposit and the amount borrowed, but it can cost $10,000 or more on a home loan of $500,000. The First Home Loan Deposit Scheme saves borrowers from having to pay this additional cost.
You’ll be eligible for the First Home Loan Scheme if you satisfy all of the following criteria:
It’s important to understand that you can use the First Home Owner Grant (FHOG) as part of the 5% deposit that you need to raise to be eligible for the First Home Loan Deposit Scheme.
In Victoria, the FHOG is available if you’re an eligible first home buyer purchasing or building a new home. The FHOG is $10,000 for new homes in Melbourne and $20,000 for those in regional areas.
The First Home Loan Deposit Scheme is administered by the National Housing Finance and Investment Corporation (NHFIC). However, you don’t apply for the First Home Loan Deposit Scheme directly through the NHFIC. Instead, you apply to one of their more than 30 partner lenders.
Choosing a lender for your home loan is the biggest financial decision you’re likely to ever make. It’s important to understand that even a small difference in home loan features, terms and conditions can make a big difference to your repayments over the life of your loan.
At ARG Finance, our experienced team of mortgage brokers can help you to find a suitable home loan. We’ll take the time to understand your needs before recommending the right lender and home loan for you.
Contact us today to find out how you can take advantage of the First Home Loan Deposit Scheme to buy your first home sooner!
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