What is the First Home Loan Deposit Scheme 2020?

The ‘First Home Loan Deposit Scheme’ is a new plan that the government is going to be bringing in 2020, to make it easier for Australians to buy their first home. The scheme will come into effect on the 1st of January 2020 and will be available to first home buyers with an income of up to $125,000 (or $200,000 for a couple). The first home loan deposit scheme will help first home buyers get into the market much easier by:

  • Helping first home buyers purchase a house with a deposit as low as 5%
  • Saving first home buyers around $10,000 in Lenders Mortgage Insurance
  • Prioritising small lenders to boost the competition and keep rates competitive

The scheme means that rather than having to save up a full 20% deposit, first home buyers will require much less at just 5%. Although you will still need to be able to service a loan, this huge drop will allow first home buyers to purchase a house quicker as you won’t have to save up as much first. For example, if you wanted to buy a property for $400,000, you used to need $80,000 as a deposit. Now with the reduced rate, you would only need $20,000. So, if it was going to take you 8 years to save a deposit before, now it will only take you two! That’s a pretty big difference.

First Home Hero’s Offer

The great news is that the scheme not only means saving less of a deposit but in some cases, you might not need to save for a deposit at all. If you were to buy a house and land package through First Home Hero as a first home buyer, you would be eligible for the governments First Home Owners Grant of $15,000. To make things even easier, First Home Hero is matching the first home owners grant, leaving you with a total of $30,000 towards a deposit. More than enough to cover the 5% deposit, and to buy your first home.

If you’re eligible, First Home Hero will help you to get your new home from start to finish. We will do everything from organizing your finance to helping you pick the block of land and facilitating the build. Apply for First Home Hero’s service in this Pre-qualifying Form.

Want to know more about how to apply for the First Home Loan Deposit Scheme 2020? Browse our collection of articles in our Blog Section.