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First Home Buyers

First Home Buyer Savings Explained

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Why the time to buy is now!

First Home Buyer? We’ve never seen a better time to get into the market!

Interest rates are historically low, and as announced in the 2021-2022 Federal Budget there is plenty of government assistance available.  In Victoria, you can get up to $10k (or $20k if you live in Geelong and buy before 30 June 2021) or in Queensland up to $15k towards your home.

As an extra sweetener, they have also announced they are extending their New Home Guarantee meaning you can secure your home with a 5% deposit without paying a cent in Lenders Mortgage Insurance! 

Keep reading below to find out more about the current grants and incentives helping you into your first home. And just a note that this advice is general and does not take into account your objectives, financial situation or needs. You should consider whether the advice is suitable for you and your personal circumstances.

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5% deposit with First Home Loan Deposit Scheme

Can’t save 20%? The New Home Guarantee scheme is here to help!

The recent 2021-2022 Federal Budget announcement means an extra 10,000 first-home buyers will be able to purchase their new home with deposits as low as 5 per cent. It also means you don’t have to pay pesky Lenders Mortgage Insurances which could save you $20k if you’re looking at a $550k loan.

More information on the scheme is expected to be announced this week.

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Top Tip

Eligibility requirements vary from state to state, so be sure to visit your state's office of revenue website.

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$10-20k First Home Owners Grant in Vic & $15k in Queensland

The First Home Owner Grant scheme (FHOG), is a government assistance program designed to help you get into the property market. Incentives for people living in Victoria include a $10,000 First Home Owner Grant (FHOG) for new homes valued up to $750,000 (or $20,000 if you’re in regional Victoria and buy before 30 June 2021) as well as stamp duty concessions. Incentives for people living in Queensland include a $15,000 FHOG for eligible first home buyers who are buying or building a new home up to the value of $750,000 – including off-the-plan.

There are a bunch of conditions that apply that do vary from state to state. The main one includes that the eligible property must be a brand new home (purchase or construction) up to a maximum value of $750,000, you can’t have previously received the grant or owned a residential property and you will need to live in the house for a minimum of 12 continuous months (the grant isn’t available on investment properties). Read more on the FHOG here.

Keep in mind that like all government schemes, they are subject to change. So get the latest information from the State Revenue Office website relevant to your State.

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First Home Super Saver Scheme increased to $50k

First introduced in the 2017-2018 budget, the First Home Super Saver Scheme has increased the maximum amount of voluntary contributions that can be released from $30,000 to $50,000. It means that you’ll be able to release $50,000 from your super funds as long as you are going to live in the property you buy with the proceeds.

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Up to 50% in Stamp Duty savings

In the 2020-2021 Victoria State budget, there was a host of measures intended to stimulate the housing market and building industries, including stamp duty discounts of up to 50%. What does that mean for First Home Buyers? Previously you only qualified for the full stamp duty exemption if the property was under $600,000 with a sliding concession available for homes over that and valued up to $750,000. Now, you can now combine that with the 25% or 50% stamp duty discount until 30 June 2021. So make sure you get in quick!

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Family Home Guarantee for single parents with dependants

A new home Family Home Guarantee was also announced in the 2021-2022 budget. Under the scheme, eligible single parents are able to build a new home or purchase an existing home with a deposit of as little as 2%. The guarantee will be open for applications from 1st July 2021 and will offer 10,000 places over four years.

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Interest rates as low as 1.89%!*

The historically low interest rates are great news for First Home Buyers. Our finance partner MAB has rates as low as 1.89% fixed for 2 years (comparison rate 3.19%)*. Because lower interest rates means lower repayments, your borrowing capacity can be higher compared to a high interest environments. That means you could potentially be approved for a higher loan amount compared to what you would if there were higher interest rates. While lenders will still work with a buffer just in case interest rates rise – interest rate rises aren’t likely to happen any time soon.

Learn more about our finance partner MAB, and speak to them today!

*1.89% fixed for 2 years (comparison rate 3.19%)*  is based on lowest market interest rate currently advertised and may be subject to change. This figure is a guide only and Porter Davis will not be held responsible for customer’s ability to obtain this rate. *WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Please speak to our MAB representative for details.

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Seek independent advice

The information contained in this article is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Porter Davis recommends that you seek independent legal, financial, and taxation advice before acting on any information in this article.

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