First home loan deposit program extended ahead of federal budget

The First Home Loan Deposit Scheme allows first-time home buyers to enter the market earlier by buying with a deposit as little as 5% by guaranteeing up to 15% of the value of the house, which saves them paying Lenders Mortgage Insurance (LMI).

The program, which has already helped nearly 20,000 first-time buyers, is currently limited to 10,000 spaces per fiscal year on a first-in, best-dressed basis.

But the federal government will now allow an additional 10,000 first-time home buyers to participate in the program from October 6 to June 30, 2021.

But there’s a catch – this time around, applicants will only be able to apply for the program on the condition that they buy new builds.

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Treasurer Josh Frydenberg said it was to help support the homebuilding industry.

“Helping another 10,000 first-time home buyers buy a new home through our first-time home loan deposit program will help support all of our trades throughout the supply chain, including painters, builders , plumbers and electricians,” Frydenberg said.

“In addition to the government’s HomeBuilder programme, these measures will support home building activity and jobs across the industry at a time when the economy and the sector need it most.”

New property price caps will also apply under the extended scheme.

First-time home buyers will be able to purchase new homes worth up to $950,000 in Sydney, $850,000 in Melbourne, $650,000 in Brisbane, $550,000 in Perth, Adelaide, Hobart, Canberra and Darwin.

First-time home buyers must apply for the program through one of the 27 lenders participating in the program to be eligible.

Housing Industry Association chief executive Graham Wolfe welcomed the news, saying the scheme has helped thousands of first-time homebuyers realize their dream of home ownership sooner.

“The fact that first-time homebuyer demand is so great that the government has decided to expand the scheme shows what HIA research has suggested from the start – Australians are still clinging to the dream of home ownership. home ownership and the security it brings,” said Wolfe.

“The additional 10,000 places for new homes and flats the government has put into this scheme will ensure that more first-time homebuyers reach their goal of owning a home sooner.”

The announcement comes ahead of Tuesday’s federal budget, which is expected to post a deficit of more than $200 billion.


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