The 2021/22 Federal Budget has been announced and there 3 key initiatives which will help first home buyers and single parents get into a home of their own.
We know budget initiatives and government websites can be confusing so here is a simple breakdown of what we know so far:
- A brand new initiative called the Family Home Guarantee will assist single parent families get in to a home of your own from as little as 2% deposit and no Lender Mortgage Insurance!
- The current First Home Loan Deposit Scheme, which allows First Home Buyers to get into a home with only a 5% deposit, will be extended to an additional 10,000 buyers.
- Super withdrawal limit has been increased to $50,000 under the First Home Super Saver Scheme.
What is the Family Home Guarantee?
The brand new Family Home Guarantee is designed to help single parents get into (or back into) the property market and get out of the rent trap. From this July, single parents with at least one dependent will be able to buy a home with a deposit of just 2%! The Government will then guarantee the remaining 18%.
This means no Lenders Mortgage Insurance, which we know can be a barrier for people building their own home.
From 1 July 2021, 10,000 Family Home Guarantees will be made available over four financial years. Places open in July, but it’s important to start the process of building your own home now to make sure you’re ready to apply for finance when the scheme opens.
What is the First Home Loan Deposit Scheme?
The First Home Loan Deposit Scheme is an Australian Government initiative to support first home buyers purchase their first home sooner, which has been running since 2020 and was in high demand.
Usually first home buyers with less than a 20 per cent deposit need to pay lenders mortgage insurance. Under the Scheme, eligible first home buyers can purchase or build a home with a deposit of as little as 5% (lenders criteria also apply). The government guarantees 15% of the home so eligible buyers do not need to pay the traditional Lenders Mortgage Insurance (LMI). This means you could get into your own home with less savings and it could save you thousands on LMI costs.
It has been announced that an additional 10,000 places available will be available from July 2021 and will roll out over a 4 year period, and as this is available across the whole country, it is sure to be in high demand.
What is the First Home Super Saver Scheme?
Simply put, the First Home Super Saver scheme allows first home buyers to save money for your home inside their super fund.
Under the scheme, eligible first home buyers, who make voluntary super contributions into their super, can withdraw these amounts (in addition to associated earnings / less tax) from their super fund to help with a deposit on their first home. If you’re eligible, the maximum amount of contributions that can be withdrawn under the scheme is up to $50,000. (But you don't need that much to get started!)
How to see if you are eligible?
Whether you are a first home buyer or single parent, if you would love to get into a new home of your own, the easiest thing to do is reach out to Easystart’s finance experts today. We can help you determine how much you can borrow, check you meet the government eligibility criteria and guide you through the whole process. That’s what we do – we make it easy for you.
T&Cs and eligibility criteria apply.
Information shared here is general in nature. Please consider your personal financial circumstances before taking action.
Eligibility at the discretion of state and/or federal government. Please refer to Government websites for further information. Lenders terms and conditions apply.