Up to 1,800 Australians will be able to purchase a home with 5 per cent deposits as the Government reissues unused first-home buyer guarantees.
Under the first home loan deposit scheme, the Government guarantees loans of up to 95 per cent for first home buyers, allowing them to avoid paying lenders’ mortgage insurance.
On the average Sydney home valued at $879,299, taking out a loan with a 5 per cent deposit would normally attract $37,172.36 in lenders’ mortgage insurance.
The scheme is open to first home buyers provided they don’t have an income exceeding $125,000 as a single or $200,000 as a couple, and are buying homes within the designated price caps.
Under this phase of the scheme, which ran from 1 February to 1 July 2020, an extra 10,000 spaces were made available for people purchasing or building new homes.
However, around 1,800 guarantees were not finalised.
“The Morrison Government will reissue unused guarantees from the 2019/20 financial year from buyers who have since been unable to complete their purchase of their first home,” Assistant Treasurer Michael Sukkar said on Wednesday.
“This represents a great opportunity for around 1,800 buyers to now enter the property market sooner. First home buyers will be able to apply for these guarantees from the Scheme’s lending panel lenders in the coming days.”
Sukkar said that over the different iterations of the scheme, 15,000 Australians have moved into a home since 1 January 2020.
The announcement comes as Australian house prices hit record highs, with a new median value of $581,157 as of January 2020 following a 0.9 per cent increase.
And according to Finder’s panel of experts and economists, the only way is up from here.
They predict Sydney values will increase by as much as $53,305 in 2021 to reach a staggering price of $1.03 million.