Why first home buyers are the winners from the latest Federal Budget?

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Family With Baby Meeting Financial Advisor At Home

With soaring property prices, Australia is one of the most expensive countries to live in and own a home. A combination of record-low interest rates, low supply of homes being sold and the first home buyers’ fear of missing out are all fuelling the demand and the rise in the price of homes.

The biggest hurdle of first home buyers is saving enough money for a deposit. With the First Home Super Saver Scheme as a way to save for the deposit, with the First Home Loan Deposit Scheme requiring only a 5% deposit from first home buyers and with the Family Home Guarantee aimed at helping single parents at home ownership with just a 2% deposit, it has never been a good time for first home buyers to enter the market.

  1. FHLDS (New Homes) extended for 2021 to 2022

The governments FHLDS (New Homes) will be boosted by another 10,000 places. The First Home Loan Deposit Scheme was introduced in January 2020 and was extremely popular for first home buyers. As part of this scheme, the buyer only requires a 5% deposit and the government will act as guarantor for the remaining 15%.  As a result, first home buyers avoid paying loan mortgage insurance. This scheme is available through Commonwealth Bank, National Australia Bank and 25 other participating lenders. Interested, read our article about the First Home Loan Deposit Scheme and how it works. You will need to act quickly with almost all spots secured after becoming available.

  1. First Home Super Saver Scheme (FHSSS)

This scheme was introduced in the Federal Budget in 2017, but has been expanded to allow first home buyers to release up to $50,000 from their superannuation, up from the previous $30,000. This scheme allows eligible first home buyers to dip into their Superannuation to withdraw up to $50,000 to use as a deposit towards an owner occupied purchase. The increase will take effect from 1st July 2022. The scheme allows first home buyers to make voluntary contributions to their super either before or after tax and use these savings towards their deposit.

For most first home buyers, the First Home Super Saver Scheme could boost your savings up to 30% faster, compared with saving through a standard deposit account. This is due to the concessional tax treatment and the higher rate of earnings often realised within superannuation.

  1. Family Home Guarantee/ No Deposit Home Loan

This “guarantee” is aimed at helping single parents into home ownership. The guarantee enables eligible single parents to be able to build or buy a new home with only a 2% deposit. You will need to be able to service the loan to be eligible. Places will start to become available from July 1, 2021. However, only 10,000 places will be available over 4 years nationally so you will need to act quickly for this also.

Yes, it can be tough to get a foot on the property ladder, but first home buyers should not be deterred. About a third of millennials and a quarter of all Australians plan to buy a property in the next two years with many using the
lockdowns in 2020 to up the ante on their savings. There is no better time than now for First Home Buyers to dive in and make that commitment – if possible.

You can read more about these initiatives, as well as some other measures aimed at home buyers and owners here

Contacting a mortgage broker early in your search is often a wise idea as it may allow the broker time to understand your circumstances and potentially help prepare you for a successful loan application when the time is right.


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