The Federal Government has released an extra 30,000 spaces on the First Home Loan Deposit Scheme (FHLDS), with the change of month marking a new period for the policy.
10,000 will be provided under the existing scheme, where buyers can use government assistance to reduce their deposit to as little as 5%.
A further 10,000 spots will go to those building a new home or buying a new build. The final 10,000 is to be allocated under to eligible single parents, who can take advantage of the policy announced in the Federal Budget back in May to get their deposit reduced to 2%.
While the new scheme has been welcomed, experts have sounded notes of caution of late, in particular pointing out the effect that taking on a mortgage with such a small deposit might have on the ability of borrowers to repay should financial conditions change.
“NAB is proud to support customers interested in buying their first home through the First Home Loan Deposit Scheme (FHLDS),” said Andy Kerr, NAB Executive, Home Ownership. “The Scheme helps Australians own their first home sooner and provides a boost to the residential construction industry.”
“Demand remains strong and we’ve now supported 6,350 customers to purchase their first home through the FHLDS. The higher price caps will provide greater flexibility for Australians looking to purchase their first home through the Scheme.”
“We welcome the new initiative for single parents, recognising that buying a home is often a major challenge for Australians on a single income. We expect the Family Home Guarantee will provide hope and build confidence for single parents to enter, or in some cases re-enter, the property market.”
