First Home Loan Deposit Scheme - 10,000 places up for grabs

The second allocation of spaces under the government's First Home Loan Deposit Scheme (FHLDS) have now been released 1 July 2020.

This scheme gives eligible first home buyers across Australia the opportunity to contribute as little as a 5% deposit without having to pay Lenders Mortgage Insurance (LMI).

Lenders Mortgage Insurance applies whenever buyers have less than a 20% deposit. LMI is applied on a sliding scale so the smaller the deposit, the higher the LMI that is charged.

For many First Home Buyers, given mortgage insurance can add significantly to a loan when only a small deposit has been saved, the opportunity to avoid LMI has its advantages.

Of the 27 participating lenders, only two major lenders are a part of the scheme with the remaining allocation being given to 25 non-major lenders. This means that your choice of bank must come from the approved list of participating lenders.

To be eligible, borrowers must meet the First Home Loan Deposit Scheme's criteria together with the usual bank lending requirements. Importantly, for those in metro Melbourne, the value of the property being purchased cannot exceed $600k. Up to that price, Stamp Duty is also waived in Victoria for First Home Buyers.

With only 10,000 places available across the whole Australia, it means that interested First Home Buyers need to act quickly in getting their pre-approvals in and assessed.

To find out more about the First Home Loan Deposit Scheme and whether you are eligible, please contact me bleahy@theedgemortgages.com.au