Loophole in FHSAs: Act before the end of June, aggregator warns

by AB07 Jun 2013

Potential first home buyers have the opportunity to take advantage of a loophole in the government-funded First Home Buyer Savings Accounts (FHSAs) if they act before the end of the financial year, according to aggregator Loan Market.

The group’s corporate spokesperson, Paul Smith, says any aspiring first home buyers could cut the waiting time to access their money in half by taking out an account between now and June 30th.

"One of the big drawbacks of the accounts is that you have to keep the money in the FHSA for four financial years. However, if you apply in June, you satisfy this criteria in as little as two years and two days. If a buyer opens an account this month, they can cut the waiting time for the benefits of this scheme in half," says Smith.

He argues that FHSAs are a well-intentioned initiative by the government, but that not enough people know about the scheme and can often become overwhelmed by the detail and rules.

"With the right planning and preparation, these types of accounts can significantly help borrowers boost their deposit. The government will annually contribute 17% for deposits up to $6,000. It's impossible to find guaranteed returns like that anywhere else."

"With returns on savings accounts and term deposits dropping with the RBA cash rate, it's becoming more difficult for borrowers to find secure places with sizeable returns. A FHSA offers a guaranteed return, higher than most other investments. It just comes with lots of rules but with strategy it gives buyers a big advantage.”