MAY 13, 2019: First home buyers will receive a helping hand to get into the housing market through a new Morrison Government initiative to slash the amount of money needed for home loan deposits, one of the biggest barriers to home ownership.
Saving a deposit for your first home can be a real struggle, with most banks and lenders requiring a minimum 20% deposit or at the very least forcing borrowers to pay tens of thousands of dollars extra through mortgage insurance if they can’t get there.
From 1 January next year, a re-elected Morrison Government will give first home buyers the chance to get into the market with a deposit of 5% and without the need to take out expensive mortgage insurance, through a First Home Loan Deposit Scheme.
The loans would be supported by the National Housing Finance and Investment Corporation (NHFIC). This will allow lenders to offer loans they would otherwise turn down or would require lenders mortgage insurance on.
The scheme will be available to first-home buyers with an income of up to $125,000, or $200,000 for a couple who are both first home buyers. This means, if you’re a couple earning under $200,000, or an individual earning under $120,000, and you want to buy your first home valued at $600,000, you will only need to save a deposit of $30,000, instead of $120,000.
It will be capped to a house price value determined on a regional basis, reflecting the different property markets across Australia.
The new First Home Loan Deposit Scheme together with our existing First Home Super Saver Scheme that allows Australians to save for a deposit fast through superannuation accounts, will help people achieve their goals years faster. Last year 110,000 Australians bought their first home, the highest level in nine years. We want to build on this result.
Our plan to back first home buyers stands in stark contrast to Bill Shorten and the Labor Party who want to abolish the First Home Super Saver Scheme and jack up rents with their Housing Tax, making it more difficult for first home buyers to get into the market.
Labor’s devastating Housing Tax is a $32 billion tax grab that will hit all Australians. If you own your own home it will be worth less and if you rent you will pay more.
Experts have estimated that Labor’s Housing Tax would result in house prices falling by as much as 16 per cent and rents up as much as 22 per cent.
The Morrison Government’s plan for a strong economy and records job growth will protect the value of your home and help first home buyers get into the market.