More single parents and first-home buyers will be able to buy a home with a very small mortgage deposit as the federal government expands the Home Guarantee Scheme in the Budget.
Saving up for that coveted 20 per cent deposit takes a decade on average and it’s getting harder with house prices still surging by a third, over the year, in both capital cities and regional areas.
Record-low 0.1 per cent interest rates have helped existing home owners buy another house but the strongest annual property price growth since 1989 has locked many low-income Australians out of real estate.
In Tuesday night’s Budget, Treasurer Josh Frydenberg will announce 50,000 new places a year under the Home Guarantee Scheme, expanding on the program introduced in last year’s Budget.
More single parents and first-home buyers will be able to buy a home with a very small mortgage deposit as the federal government expands the Home Guarantee Scheme in the Budget (pictured is Prime Minister Scott Morrison with truck driver Julie Moore in western Sydney)
Saving up for that coveted 20 per cent deposit takes a decade on average and it’s getting harder with house prices still surging by a third, over the year, in both capital cities and regional areas (pictured is a home buyer in 2020)
In one part of the scheme, single parents with dependent children will be able to buy their first home or re-enter the property market with a two per cent deposit, without having to take out expensive lender’s mortgage insurance.
Taxpayers will underwrite the rest of the 20 per cent deposit.
The Family Home Guarantee will set aside 5,000 places each year from July 2022 to June 30, 2025.
Another 35,000 places each year will be reserved from July 2022, up from 10,000, under the First Home Guarantee enabling eligible first-home buyers to buy a new or existing home with a deposit of just five per cent.
First-home buyers can already take advantage of state government stamp duty exemptions with $650,000 the threshold in New South Wales and $600,000 the cut-off in Victoria.
The federal government is also establishing a new Regional Home Guarantee giving a subsidy each year to 10,000 borrowers, including first and non-first home buyers, to buy or build a new home between October 1, 2022 and June 30, 2025.
Regional house prices surged by 25.9 per cent in the year to February to $585,709, CoreLogic data showed.
But areas on the NSW Mid-North Coast have had even more dramatic increases, with Coffs Harbour’s median house price during the past year soaring by 30.2 per cent to $833,697.
In Tuesday night’s Budget, Treasurer Josh Frydenberg will announce 50,000 new places a year under the Home Guarantee Scheme, expanding on the program introduced in last …….
