How to buy your first home with just a 5% deposit?

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How to buy your first home with just a 5% deposit - blog post

With the soaring prices of homes in Australia, it seems that buying your first home sounds like an impossible dream. Yes, it can be tough to get a foot on the property ladder, but first home buyers should not give up. The secret is to take the first step of saving the 5% deposit. Here’s how.

1. Only a 5% deposit and no lender’s mortgage insurance (LMI) – until 30 June 2022 and only through participating lenders – for those who are eligible!

Under the First Home Loan Deposit Scheme eligible first home buyers can buy or build a new home with as little as a 5% deposit.  To avoid paying LMI, you need to have at least a 20% deposit but under the FHLDS, the government guarantees the remaining 15% of the value of the property purchase. 

2. First Home Buyer’s Assistance Scheme

Besides saving for a deposit, stamp duty can be another big barrier to hone ownership. However, most states and territories offer some assistance on this cost, including some exemptions, for eligible first home buyers.

Accessing one or more of these schemes or incentives could provide assistance you need to buy your first home. It could also potentially save you tens of thousands of dollars.

A first home buyer in NSW will not pay stamp duty if they are purchasing a block of land for $400,000, a savings of $13,335.  We have prepared a downloadable TOPIC SHEET of just some of the schemes and concessions available for those who are eligible or you can read more of the First Home Buyer Support: State by State Guide HERE.

3. First Home Owner’s Grant

First home buyers buying a new home or a substantially renovated home in NSW, with a value of less than $600,000 can qualify for the $10,000 first home owners’ grant. If you are buying land to build on, the combined value of the land and any home you intend to build must be less than $750,000 to qualify for the grant. 

You can read more about the first home buyers grant provided by each state HERE

 4. Some lenders are offering bonus first home buyer incentives

From bonuses offered at settlement, conveyancing fee rebates, no account keeping and establishment fees to no application  and valuation fees – these are a few of the incentives offered by some lenders to attract first home buyers (however these include specific criteria and conditions).

Accessing one or more of these schemes or incentives could provide assistance you need to buy your first home. It could also potentially save you tens of thousands of dollars.

But before considering any of these options CONTACT US, so we can help steer you through the various options that my be appropriate for your specific situation. It is important to understand the various terms, conditions and eligibility criteria.

A FHB opportunity awaits

If you are one of the lucky ones who have remained financially stable, this could be your opportunity.

While there are always varying peaks and troughs in different property markets across the country, now could be an ideal time for FHBs to get into the market… Why?

  1. Historically low interest rates make borrowing cheaper than it has ever been
  2. Government incentives, spending and infrastructure initiatives continue
  3. Consumer confidence is returning as we adapt to the new normal
  4. Simpler lending rules for home loans are expected shortly.

Knowing where to start, taking the initial steps and navigating through the whole process can be overwhelming. We can step you through the process from the initial stages so you can rest assured you will be well informed for one of the biggest decisions in your life. We have the experience and knowledge, along with access to a wide array of lenders, to ensure you are successfully guide through your first home buying journey. 

 

Searching for your first home or next investment? Let us help you choose a home loan that's right for you. Click below for a 30 minute chat with us.

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We are a team of qualified professionals who have been in the mortgage broking industry for the last 10 years. We are also property investors who have accrued the knowledge and experience to help you achieve your property goals.

Learn the right strategy and find the resources to empower you to buy your first home, to refinance or to purchase your first investment property. Our team of brokers can guide you through the home buying process and answer your questions,
including:
➔ Where and what you can buy?
➔ How much deposit will you need?
➔ How much can you borrow?
➔ What are all the other costs involved?
➔ How can you repay my mortgage quickly?
Our role as your mortgage broker is to guide you through the process to ensure that all your needs and options are considered.