The First Home Loan Deposit Scheme is an initiative offered by the government to get first home buyers into the property market sooner, even with a smaller deposit.
Under the scheme, you would only need to save a 5% deposit of the property value without having to pay Lenders Mortgage Insurance (LMI), which could be a hefty fee levied for loans that are above 80% loan to value ratio.
For instance, if you are buying a property worth $650,000 and you only have $50,000 saved up, you could end up paying over $16,000 in LMI premium. So under this scheme, you would not have to pay this premium, even with a 5% deposit.
So, you would essentially be borrowing 95% of the property value without having to pay LMI.
The First Home Loan Deposit Scheme benefits first home buyers in the following ways:
- First home buyers will be getting into the property market sooner, even with a smaller deposit.
- You would save thousands of dollars without having to pay LMI.
- Your savings would be used towards mortgage repayments rather than paying rent.
- The First Home Loan Deposit Scheme can be used in tandem with other government concessions like the First Home Owners Grant (FHOG) and First Home Super Saver Scheme.
Give us a call on 1300 889 743 or fill in our free assessment form to find out if you qualify for a home loan even with a low deposit.