With the 2022 Budget set to be released on March 29, speculation linked to the FHLDS is rife amongst consumers and financial industry experts alike.
The First Home Loan Deposit Scheme (FHLDS) was first released on January 1, 2020, and is an Australian Government initiative to support eligible first home buyers to build or purchase a first home sooner. While buyers are usually required to save a 20% deposit or otherwise pay Lenders Mortgage Insurance, under the FHLDS, eligible first home buyers can purchase or build a new home with a deposit of as little as 5%, with the government actually guaranteeing the remaining amount.
In essence, the FHLDS functions in a similar fashion to a traditional family guarantor loan, except it’s the government that fronts up to vouch for you, and in turn shoulder the risk. While the scheme doesn’t offer a cash payment, the good news is that you can use it in conjunction with any other government grants, schemes, concessions and waivers you qualify for, with the aim being to get Australians into their first home faster.
While the FHLDS has received numerous amendments since it’s initial launch, with the upcoming Federal Budget for the year set to be announced on Tuesday 29 March, industry experts and first home buyers alike are anxious to see whether the FHLDS will be sticking around for another twelve months, and what further changes we can expect to see.
The Future Of The First Home Loan Deposit Scheme
While there are plenty of places available in the First Home Loan Deposit Scheme that allows first-time buyers to put down a deposit of just 5%, the catch is that the scheme is due to expire on June 30. With just over 4000 approvals still available as of January 2022, financial industry experts are speculating that the FHLDS could be extended once again in the upcoming 2022 Federal Budget.
Under the current terms, first home buyers can purchase an existing house, townhouse or apartment, a house and land package, land and a separate contract to build a home, or an off-the-plan apartment or townhouse. So far, the FHLDS and similar initiatives introduced by the Federal Government have helped more than 58, 000 people purchase homes. Oddly enough, more than half of the guarantees offered by the low-deposit schemes have been taken-up by women.
It’s also worth noting that from July 1 2022, the amount that can be held inside super for a home purchase under the First Home Super Saver Scheme (FHSS) will rise to $50, 000, up from $30, 000 – however, the maximum annual super contributions that can be put toward a home deposit is capped at $15, 000. While contributions must be voluntary, rather than compulsory, employer-paid super, the scheme has been designed to encourage younger Aussies to save, and in turn be taxed less accordingly.
So far, figures from the Federal Government show that around 26, 800 first home buyers have released $371 million to purchase their first home under the FHSS scheme, indicating that more Australians than ever are using every single tool at their disposal to get a foot on the property ladder.
Considering that Australia is rapidly approaching an election, figures such as these are policy makers and marketing tools for the Liberals, who will no doubt be going hard after an “economy first” pitch to spruik to voters. When coupled with the financial pressure that many Australians are facing thanks to the rising cost of living and extremely hot property market, it’s unlikely that the FHLDS will face the axe in the upcoming 2022 Budget.
Your Secret Weapon As A First Home Buyer
Buying your very first home – and obtaining the finance to do so – can be a time consuming and stressful exercise. Thankfully, the good news is that it doesn’t have to be.
Since their inception in 2012, Madd Loans have worked tirelessly in providing Queenslanders with the finance tools to help turn their dreams into reality. With the entire brand being built on referrals, George takes great pride in making the mortgage process both fun and educational – and he has a swag of awards to prove it.
When it comes to navigating the property world, knowledge is power – so why not book yourself into one of Madd Loans’ free First Homebuyer Workshops? Conducted completely online in a webinar format, George and the team at Madd Loans run participants through the world of finance when it comes to your first home loan. This digital model provides flexibility if you’re trying to work around your employment, and is also conducted in a #CovidFriendly manner.
If you would like to know more about the FHLDS the many other factors involved with buying your first property, please contact the team at Madd Loans today to book in your place at the next free First HomeBuyer Workshop.
