Tech & Science Latest data on the uptake of first home loan deposit scheme released

23:15  16 february  2020
23:15  16 february  2020 Source:   msn.com

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The federal government's First Home Loan Deposit Scheme guarantees mortgages for first home buyers who have only saved a 5% deposit , effectively helping them buy sooner without paying lenders mortgage insurance This is a trickier question to answer and experts are split on the issue.

The government has released draft legislation confirming details of the First Home Loan Deposit Scheme , set to kick off on 1 January 2020. The scheme was first announced by Prime Minister Scott Morrison during the election campaign in Sorry, we could not fetch any data for this product.

a group of people standing in front of a building: Figures show about 6,500 loans are being processed just a month and a half into the program. (ABC News: Michael Coggan)© Provided by ABC Business Figures show about 6,500 loans are being processed just a month and a half into the program. (ABC News: Michael Coggan)

Nearly half the applicants using a new Federal Government scheme to purchase a property with a deposit of as little as 5 per cent are planning to buy outside Sydney, Melbourne or Brisbane.

But new figures show many younger buyers in Sydney are still struggling to get a leg-up on the housing ladder.

The Government has today released the latest data on the uptake of its First Home Loan Deposit Scheme, which launched at the beginning of this year.

Under the scheme, the Government offers loan guarantees for properties worth up to $700,000 in Sydney or other New South Wales regional centres.

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Saving a deposit for your first home can be challenging. That’s why we're proud to work alongside the Australian government on the First Home Loan Deposit Scheme to help more first home buyers realise their The NHFIC will then provide a guarantee covering up to 15% of the property’s value.

Simply put, the First Home Loan Deposit Scheme will assist an eligible first home buyer to purchase a house with a 5% deposit . The government will provide a loan guarantee of up to 15% of the property’s value to individuals earning up to 5,000, or couples earning up to 0,000, per year.

Prices are capped at $450,000 for the rest of New South Wales.

Melbourne buyers can spend up to $600,000 on a home while the limit is $375,000 across other parts of Victoria.

The figures showed more than half the scheme's applicants so far were under the age of 30, except in Sydney.

Housing Minister Michael Sukkar acknowledged helping those younger city buyers was an ongoing challenge.

"There's no scheme, including this one, that is a silver bullet to the difficulties that particularly younger people face in our major capital cities, where their jobs are," Mr Sukkar said.

However, he said this deposit scheme was partially designed to encourage people to look beyond the capitals, by capping the property prices and including smaller and regional lenders.

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The first home loan scheme is aimed at helping low and middle income Australian first home buyers purchase a property sooner and realise their dreams An eligible first home buyer or their broker will need to enquire with one of the 27 participating lenders under the Scheme . The lender will then log

It can take ten years for the average first home buyer to save a 20% deposit .” Ken Morrison, Chief Executive of the Property Council of Australia, said Since its announcement in May, reaction to the scheme has been mixed, with concerns about the limited information available on the scheme and

"One of the things the Prime Minister and I wanted to do was make sure this didn't just become a Sydney-, Melbourne-, Brisbane-centric scheme," Mr Sukkar said.

"And if we didn't pay such close attention to the way we designed it, it could easily have gone that way."

Just a month-and-a-half into the program, the figures showed about 6,500 loans were being processed. Some of those have been approved for financing for a loan while others were at a much earlier stage.

That has left another 3,500 places in the scheme this financial year. Another 10,000 spots will become available from July.

The figures showed the average income of participants is $67,126 for single buyers or $111,534 for a couple.

The cap on an applicant's income was $125,000 for a single buyer or $200,000 for a couple.

Most of the buyers have been single.

"We've certainly put in place modest price caps around the country — this is designed for people who are purchasing a modest first home," Mr Sukkar said.

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Use the ANZ home loan deposit calculator to estimate how much money you could have left for a deposit once estimated upfront costs have been paid, such as stamp duty. Talk to a First Home Coach on the phone, or drop in for a chat at one of our ANZ branches. Sales data as at July 2019.

First Home Loan Deposit Scheme . Borrow up to 95% without requiring lenders mortgage insurance. Investment Home Loans . Whether it's your first time, or you're a seasoned property investor, Endeavour can help you find the right investment loan to suit your needs.

"Of course, if you're on a single income, you're … going to be more likely to be someone who fits within those price caps.

"If you've got a double income, perhaps your capacity is higher than a single, and my view is it probably pushes some people to looking at homes outside the house price caps."

The data also showed 70 per cent of the certificates issued so far have been for houses. Apartments made up 25 per cent and townhouses made up 5 per cent.

Kristin Brookfield from the Housing Industry Association said the early data was encouraging and seemed to indicate many young buyers were willing to look beyond the east coast capitals.

"Young people are wanting to get into the market, they're seeing the sense in getting into the market, and they're going to those regional [areas] and getting houses which are more in the $400,000 mark rather than that Sydney $700,000 mark," she said.

"Newcastle and the Illawarra have the same price cap as Sydney, which is $700,000 for the homes.

"But you would imagine that in those regional areas there's a bigger choice in terms of houses, there is apartment building going on in those areas, unlike some of the more regional towns where you're likely to see just houses and not very much in the apartment stock.

"So I think it really just reflects where people think they can afford to buy a house."

However, Ms Brookfield worried the price caps under the scheme were still too restrictive for those wishing to buy a new home in Darwin ($375,000) or Perth ($400,000).

"We would like to talk to the Government about how we can stimulate new building in those regions," she said.

The deposit scheme was first announced in the lead-up to the Federal Election.

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