First home buyers purchase homes faster using loan scheme
Exclusive: Eager first home buyers have rushed to sign up to the Federal Government's First Home Loan Deposit scheme which is on track to fill fast.
New figures released by the National Housing Finance and Investment Corporation showed more than half of all spots have filled in the second tranche, which opened in July.
About 4500 spots are pending and more than 1000 application certificates have already been approved.
Project officer Arianna Merewether, 25, and her wife Annette, 30, a childcare educator, recently purchased a four-bedroom home at Sunbury, 40km north west of Melbourne for $542,000.
The couple saved up a deposit of about five per cent - or $27,000 - and said the scheme helped fast track their ability to crack into the market.
"We had been saving for a couple of years and we had been talking to a broker about trying to save 20 per cent, but saving just five per cent took the time to buy down by a quarter," Arianna said.
"We probably bought three years ahead of where we would have been able to buy otherwise."
She said their rental repayments were $1955 per month but their mortgage repayments would be slightly higher at $1980 to own their own home.
Minister for Housing and Assistant Treasurer Michael Sukkar said the scheme has allowed "Australians to get into a home of their own sooner".
"Helping even more Australians get into their first home with a deposit of as little as five per cent is helping set them and their families up for a successful future," he said.
"The scheme has also been vital in driving first homebuyer confidence during the COVID-19 pandemic."
Buyers need just a five per cent deposit saved which means those with smaller deposits escape expensive lenders' mortgage insurance (LMI).
This is a charge which usually costs thousands of dollars and protects the lender - not the borrower - if there is a default on the loan.
And despite Victoria's strict lockdown it remains the most popular location in the country for applications followed by Sydney.
The average income of single applications applying is $56,700, while for couples it's $96,000.
Bendigo and Adelaide Bank's head of local banking Nick Carter said they had been flooded with about 100 inquiries a day when the scheme opened up again in July.
"We need your pay slips and what you have in savings and then we go through a screening process to make sure the amount you want to borrow stacks up," he said.
"We encourage our existing customers but also prospective customers to contact us straight away."
The Commonwealth Bank and National Australia Bank are part of the scheme and another 25 smaller lenders.
Originally published as First home buyers purchase homes faster using loan scheme