Gone are the days when you had to save up for the traditional 20% deposit before approaching the banks for a mortgage to buy your first home.
Nowadays, it’s easier than ever to enter the property market! With a 5% deposit and the federal government’s First Home Guarantee scheme (FHG), you can purchase a home without paying for lenders’ mortgage insurance (LMI).
NAB – one of two major lenders (alongside dozens of non-majors) that provides finance under the scheme – recently released some pretty insightful data on who is jagging the limited spots each year.
The data shows almost two-thirds of people (63%) who purchased a house under the scheme were single buyers – whereas for non-scheme purchases, single buyers only made up 49% of borrowers.
Of the single people snapping up First Home Guarantee spots, 59% were female and 41% were male.
Government data also shows that the median age of people using the scheme is 25 to 29 years old.
“People going at it alone shouldn’t be disadvantaged and we are seeing the scheme help them buy a property,” says NAB Executive Home Ownership, Andy Kerr.
How the scheme helped one homebuyer purchase 4 years sooner
The scheme enables first home buyers to purchase a property 4 to 4.5 years sooner on average, as they don’t have to save for a standard 20% deposit. This is a great opportunity for those looking to get into the property market sooner!
Better yet, not paying LMI can save you anywhere between $4,000 and $35,000, depending on the property price and your deposit amount.
This is exactly what helped car salesman Rihan Nasser purchase his villa unit last August.
Initially, Rihan had been crunching the numbers on what he’d need to do to save a 20% deposit, admitting “it would have taken him years”.
“The scheme fast-tracked the process by maybe two, three or four years and made it easier to come up with the deposit to buy,” says Rihan.
“Once I knew I needed 5%, I knuckled down on the saving. It took me about a year and a half. I would 100% recommend the scheme. It made it so much easier.”
How you can take advantage of the scheme and get started today
The catch with the First Home Guarantee scheme is that spots are usually filled on a first-come, first-served basis. And don’t let this year’s expansion to 35,000 spots lull you into a sense of complacency – they’ll get snapped up fairly quickly.
If you’re a first home buyer looking to get into the property market, we can help you today. We can explain the scheme in more detail, check your eligibility, and help you apply through a participating lender. Get in touch now and let’s get started!
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