What Is The 5% Deposit Scheme For First Home Buyers?

First Home Buyers 5% Scheme

The scheme is due to start on 1 January 2020, the government plans to provide a guarantee to buyers earning less than $125,0000 a year. 

One of the requirements is that you have a deposit of between 5 and 20 percent of the purchase price.  The current situation is that borrowers without a 20% deposit are required to have mortgage insurance.

The scheme will be limited to 10,000 first home buyers a year.  This equates to about 10% of first home buyers in the market.

The outline of the key details is yet to be released on how the scheme will work.

What is Known?

🔥  It will be on a “first in first served” basis;

🔥      Limited to 10,000 first home buyers per year;

🔥      Limited to single earning $125,000 and couples earning less than $200,000 per annum;

🔑      It is due to start on 1 January 2020;

🔑      You must have a minimum deposit of 5% of the purchase price;

🔑      The prices thresholds will be dependent on City and Regional areas;

🔑      Serviceability lending guidelines will apply.

What Is Yet is to Be Decided

🚦     The finer details of legislation and how the guarantee will work;

🚦      When the government will be accepting applications;

🚦      The application processes.

As more information becomes available, we will provide Updates.

Important information The contents of this article do not constitute legal, financial or commercial advice or a recommendation of any servicesor products.  You should consider obtaining independent advice from a qualified person before making any decisions.