First Home Loan Deposit Scheme

Last week, on the 28 October 2019, the government announced the introduction of the First Home Loan Deposit Scheme. Currently, borrowers are required to provide a 20% deposit or alternatively pay costly Lenders Mortgage Insurance (LMI). Under the new scheme, the government will guarantee first home loans allowing first home buyers to borrow up to 95% of their home, as a result allowing them to provide a much smaller deposit without the need to pay LMI. 

The government has been quick to outline the First Home Loan Deposit scheme’s criteria:

State / Territory Capital city and
regional centres
Rest of the state
NSW $700,000 $450,000
VIC $600,000 $375,000
QLD $475,000 $400,000
WA $400,000 $300,000
SA $400,000 $250,000
TAS $400,000 $300,000
ACT $500,000
NT $375,000

Commentators have been quick to call out the limitations of the scheme and doubt over its projected effectiveness, however the federal Opposition did promise to match the scheme when unveiled by the current government in the last election. In October it passed through parliament with the Oppositions support and is due to be reviewed in 12 months. 

If you are in the process of planning and saving for your first home, it may be the perfect time to chat to one of our home loan specialists about getting your application ready for 1 January 2020. Fill out a 2 minute application here or call 1800 898 765.