#Everyoneneedsaplan for their First Home Loan Deposit

One of the biggest hurdles for first home buyers is being able to save the deposit BUT also being able to afford the mortgage insurance. Now the government has provided a solution for that problem.

From 1 January 2020 the federal government is introducing their First Home Loan Deposit Scheme to help first home buyers purchase their first home. Effectively the government will guarantee to the mortgage provider up to 15% of the property purchase price. Previously this guarantee would have been provided in the form of Lenders Mortgage Insurance (which was paid by the borrower, but protected the mortgage provider).

On a $500,000 house this could mean a saving of between $15,000 $20,000.

As always, there has a few things you need to consider:

• You would need to have saved the 5% deposit on the house (no mean feat considering the average purchase price of a property is around $500,000: equating to having accumulated $25,000 cash savings).
• The number of loans guaranteed under the scheme would be limited to 10,000 per year
• There are other criteria which you can read all about in this great update kindly provided by MLC (click here for details)

Whichever way you look at it, this new scheme by the federal government is a winner for young people trying to get a foothold into the property market.