The federal government will add 10,000 additional places to a scheme designed to make it easier for first home buyers to purchase a home with a small deposit.
the main points:
- The Home Loan First Deposit Program will be extended to 10,000 new locations
- All new places will be people who are buying new homes
- The government will guarantee larger loans, as new homes are generally more expensive
The first home loan deposit system allows people to buy real estate with a deposit of 5 percent, with the government guaranteeing loans up to a certain rate limit.
The government currently offers 10,000 places on the scheme each fiscal year, on a first-come, first-served basis.
But the federal government will extend the scheme to allow 10,000 additional places from October 6, on the condition that these people purchase new buildings.
Housing Minister Michael Sugar said this will help advance the construction of new homes.
“The additional grants will not only help early home buyers, but also support Australian trade jobs at a time when the economy desperately needs it,” he said.
The scheme began at the beginning of the year, and during the first six weeks, more than half of the 10,000 places in the scheme were filled.
It works by getting the government to guarantee loans for people who buy their first homes on small deposits, eliminating the need for costly mortgage insurance for the lender.
Under the scheme extended, the price ceiling will also be raised, reflecting the fact that new construction is generally more expensive.
While homes worth up to $ 700,000 in Sydney were covered under the scheme, homes valued up to $ 950,000 would now be covered.
For Melbourne the cap will now be $ 850,000, while in Brisbane the cap will be $ 650,000.
To be eligible, homebuyers must work through one of 27 participating lenders.
It comes as the government prepares to hand over the federal budget on Tuesday.