1-in-10 first-time home purchasers jumped on the market four years earlier than others

Thanks to two federal government programs that provide first-time home purchasers a leg up in the housing market, nearly 33,000 Australians were able to buy their first home four years earlier. Is it possible that you, or someone you know, is eligible?

Around here, we’re big fans of good news.

We’re feeling fairly warm and fuzzy when we hear that so many first-time home purchasers gained a leg up on the property market much sooner than they ever imagined.

Figures on the popular First Home Loan Deposit Scheme (FHLDS) and New Home Guarantee (NHG) schemes were revealed this week by the federal government.

During the fiscal year 2020-21, the data showed that the two programs aided one out of every ten first-time homebuyers.

On average, the programs allowed first-time homebuyers to delay their purchases by four to 4.5 years (FHLDS) (NHG).

What exactly are these initiatives for first-time homebuyers?

The FHLDS allows first-time homebuyers to acquire a property with only a 5% deposit (rather than the standard 20% deposit) without having to pay for mortgage insurance from the lender (LMI).

This is because the federal government will cover up to 15% of the acquisition price of the property if the lender is a participating lender.

Depending on the home price and deposit amount, purchasers can save anywhere from $4,000 to $35,000 by not paying LMI.

The NHG program is very similar, except it only applies to new construction projects, such as house and land acquisitions or land purchases with a building contract.

To account for the additional costs connected with building a new home, the NHG property price caps are higher (see here).

When it comes to the plans, who are they being used for?

Buyers are mostly young!

According to the most recent figures, 58 % of all buyers under the scheme are under the age of 30.

Nearly two-thirds of the scheme’s beneficiaries are from NSW (11,000 residents) and Queensland (9,000 persons).

And it turns out that a mortgage broker was utilized by the majority of first-time homebuyers who were able to get into one of the programs (56 % ).

Brokers, on the other hand, provided the great majority of government guarantees for the NHG scheme (72 % ).

How do I get a spot?

Good news for you. There’s also some bad news.

The good news is that as of October 6, only 2,443 of the 10,000 seats for the NHG had been filled, so there’s still time for enthusiastic first-time homebuyers looking for a new build.

The bad news is that the FHLDS is almost full for the first batch of applications, which will be issued on July 1.

According to the figures, 7,784 of the 10,000 spots have already been filled, and many of the remaining spots are on waiting lists with participating lenders.

A third similar scheme for single parents is the Family Home Guarantee (FHG), which allows qualifying single parents with dependents to build or buy a home without paying LMI with a deposit of just 2%.

You don’t have to be a first-time homebuyer to participate in the FHG, which has only 1,023 of 10,000 slots available.

Lastly, it’s worth remembering that the FHLDS is an annual program, with fresh spaces set to be available in July 2022, and the federal government earlier announced 10,000 more spots in January, which was a surprise.

Get in contact with us right now if any of the above schemes pique your interest, and we’ll walk you through everything you need to know about them so you’re ready to apply when the time comes.

To learn more, contact Premium Finance Group Australia at (07) 4720 8888 or email us at finance@pfga.com.au


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