Wednesday 01 Jul 2020
As of today, the Federal Government has opened up 10,000 more spots for first home buyers looking to crack the Australian property market with a minimal deposit. Known as the First Home Buyer Deposit Scheme, the benefit allows first-time buyers to put down just 5 percent deposit for a property with the government acting as guarantor for the remaining 15 percent. Buyers still have to pay the remaining 15 percent, as they are technically borrowing 95 percent of the property's valuation from a lender.
As of January 1 this year 10,000 applications – for couples and singles alike – were made available, with a second 10,000 made available today for the 20/21 financial year. It's a promising initiative for those looking to buy, but new research from mortgage broker Aussie has found that as many as eight-in-10 first home buyers don't understand what the scheme is or if they are eligible to take advantage of it. Aussie's Chief Customer Officer David Smith said a myriad of state and federal benefit schemes is leading to an "information overload" for first-timers.
"With some of the lowest home loan interest rates we've ever seen, alongside a fall in property prices, and the government launching new grants and schemes, this represents a huge opportunity for Australians to secure their first home," Mr Smith said."Initiatives like the First Home Loan Deposit Scheme, in particular, represent a significant opportunity for first home buyers to accelerate their homeownership goals, and yet 85 percent said they had never even heard of the scheme."The research found more than half of first-time buyers felt negatively about negotiating the mortgage market themselves, feeling overwhelmed, confused, and anxious.
"Buying a home is likely to be one of the biggest financial decisions of someone's life but with so much confusion out there, first home buyers have been coming to Aussie in droves in recent weeks to help tackle their information overload and get a better grip on the current market opportunity and what it means for them," Mr Smith said."Getting on the property ladder is within arm's reach for anyone if they dedicate themselves to growing their savings, but confusion around what can help Australians get there more quickly and easily is stopping many aspiring first home buyers from achieving their goals."