The first 3,000 spots available in the First home-buyer scheme of the Federal government have already been filled in. Since the scheme started on January 1st, the Commonwealth Bank and National Australia Bank – the only two big banks to be part of the scheme have filled out their January quota.
They’ll have to wait until February to consider an extra 2,000 applications. And from February, any of the other 25 lenders that are part of the scheme can also accept another 5,000 applications. From the 1st February, 25 smaller borrowers join the lending panel of the Scheme. Those with deposits between 5% and 20% of the purchase price will avoid paying the cost of lender’s mortgage loan insurance, usually worth about $10,000.
The Minister for Housing and Assistant Treasurer Michael Sukkar says the majority of applicants have been single buyers with a median income of $68,900. He said it was “great to see such the strong interest” in the scheme but “it is important to remember this is only the beginning”.
Sally Tindall, research director at RateCity.com.au, says first-home buyers need to “weigh up the pros and cons” so it doesn’t cost them more in the long run. This is based on the basic principle of a CBA and interest home loan for an owner-occupier at 3.32 percent.
Once applicants are successful, they will have 10 days to obtain pre-approved financing from an applicable lender to buy a property and they will have to go through settlement within 3 months.
The National Housing Finance and Investment Corporation releases 10,000 First Home Loan Deposit Scheme which guarantees this financial year and another 10,000 places will be available from July 2020.