First home buyers with a deposit of just 5% will soon have more purchasing power thanks to an increase in property price caps for the highly popular Home Guarantee Scheme.
Most capital cities will get a $100,000 boost to their property price cap from July 1, while regional areas around the country will get a boost of between $50,000 and $150,000 (exact details below).
It’s all part of the Home Guarantee Scheme (previously the First Home Loan Deposit Scheme), which allows you to buy your first home with just a 5% deposit and pay no lenders’ mortgage insurance (LMI).
First home buyers who use the scheme fast track their property purchase by 4 to 4.5 years on average, because the scheme means you don’t have to save the standard 20% deposit.
Better yet, not paying LMI can save buyers anywhere between $4,000 and $35,000, depending on the property price and your deposit amount.
The government usually issues just 10,000 spots for the First Home Guarantee every July 1, but next financial year it’s opening up 35,000 spots.
Property price cap increases
The new property price caps below don’t just apply to the Home Guarantee Scheme.
They’ll also apply to the Family Home Guarantee for single parents, in which 5,000 spots will be allocated next financial year.
NSW capital city and regional centres: $900,000 (up from $800,000)
Rest of state: $750,000 (up from $600,000)
VIC capital city and regional centres: $800,000 (up from $700,000)
Rest of state: $650,000 (up from $500,00)
QLD capital city and regional centres: $700,000 (up from $600,000)
Rest of state: $550,000 (up from $450,000)
WA capital city and regional centres: $600,000 (up from $500,000)
Rest of state: $450,000 (up from $400,000)
SA capital city and regional centres: $600,000 (up from $500,000)
Rest of state: $450,000 ( up from $350,000)
TAS capital city and regional centres: $600,000 (up from $500,000)
Rest of state: $450,000 (up from $400,000)
ACT capital city and regional centres: $750,000 (up from $500,000)
NT capital city and regional centres: $600,000 (up from $500,000)
The capital city and regional centre price thresholds apply to areas with a population over 250,000 people, including Newcastle, Lake Macquarie, Illawarra (Wollongong), Geelong, Gold Coast and Sunshine Coast.
Get the ball rolling today
Places in these schemes are generally allocated on a first-come, first-served basis.
And don’t let the expansion to 35,000 spots lull you into a sense of complacency – they’ll get snapped up fairly quickly.
So if you’re a first home buyer or single parent looking to crack into the property market sooner rather than later, get in touch today and we can explain the schemes to you in more detail and help check if you’re eligible.
And when the spots do become available over the next few months, we’ll be ready to help you apply through a participating lender.
Book a loan review meeting with us today here.
Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.