In a bid to assist first home buyers to purchase their first home, the government has unveiled details of the Federal Government mortgage scheme.
As of January 2020 the government will assist the first 10,000 first home buyers on low and middle incomes. The scheme will be open to a single person with a taxable income of up to $125,000 per year and couples earning less than $200,000 per year. As a result of the scheme, eligible first home buyers will only have to save 5% of a deposit, with the Federal Government to guarantee the difference, essentially making up the difference of the initial down payment.
The government has introduced price caps for each state and territory, the scheme’s property price caps are:
|State/territory||Capital city and regional centres||Rest of state|
There is no specific number of guarantees per state. However, with around 110,000 first home buyers expected in 2020, you will have to get in quick as the scheme will be driven by demand and capped at the first 10,000 guarantees a year.
For a first home buyer looking to purchase a property using the scheme in South Australia city or large regional centre, the applicant(s) will have to earn less than $125,000 or $200,000 as a couple. If there were to purchase a property worth $395,000 they will only require a deposit of $19,750, with the government guarantee to make up the difference of the standard down payment, up to 20%.
Applicants who wish to use the scheme will have to apply for their loan through an eligible bank or financial institution. Two of the big four banks will be chosen to take part in the scheme as well as a handful of smaller banks and regional financial institutions, ensuring there is good coverage across the country.
What are your thoughts? Will you apply for the Federal Government mortgage scheme?
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