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5% Deposit No LMI - First Home Deposit Scheme - NFHIC

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5% Deposit No LMI - First Home Deposit Scheme - NFHIC
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AssociatedJohnKKMK @ Mortgage Better on 21/07/2020 - 15:00 nhfic.gov.au (251 clicks)
Last edited 21/07/2020 - 15:01

First Home Buyer - 5% deposit, No LMI home loan deals

The First Home Loan Deposit Scheme is an Australian Government initiative to support eligible first home buyers purchase their first home sooner. Usually first home buyers with less than a 20 per cent deposit need to pay lenders mortgage insurance fee (LMI) which can cost anything between few thousand dollars to couple of tens of thousands. Under the Scheme, eligible first home buyers can purchase a modest home with a deposit with as little as 5 per cent (lenders criteria also apply). This is because NHFIC guarantees to a participating lender up to 15 percent of the value of the property purchased that is financed by an eligible first home buyer’s home loan.

Only 10,000 spots are released for this scheme every 6 months, on the 1st of Jan and 1st of July each year until further notice. The spots are given on a first in first serve basis.

There are limited number of eligible banks as per link provided.

Applicant eligibility criteria also applies, please see link for further details but the summary of the eligibility criteria is:
+ over the age of 18
+ have 5 - 20% in genuine savings
+ have never owned a property before in Australia
+ be an Australian citizen
+ taxable income for the last financial year must be less than $125k for singles, and $200k for couples.
+ purchase price must be under the price threshold for each region (https://www.nhfic.gov.au/what-we-do/fhlds/property-price-thr…)

You can apply directly through an eligible lender/bank. However if you would like guidance on your eligibility, calculations of your borrowing capacity with different lenders, loan options, and maximum purchase price - talk to a qualified mortgage adviser. For further info please contact us via phone or email. Please don't message us on Ozbargain as replies may be delayed.

John Kim
Mortgage Adviser
Bachelor of Commerce, Diploma of Financial Planning, Diploma of Finance & Mortgage Broking
M : 0433 390 648
E : [email protected]

All consumer credit related services are provided on behalf of BLSSA Pty Ltd ACN 117 651 760, Australian Credit Licence No. 391 237 by its authorised credit representatives as part of the a network operated by Brokerage House Pty Ltd ABN 40 607 041 421, trading as Our Broker CRN 485586. John Kim is a credit representative 508336 of BLSSA Pty Ltd.

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closed Comments

  • starbearer on 21/07/2020 - 15:02
    +10

    Popcorn time

  • theleech on 21/07/2020 - 15:03
    +3

    Rip, apparently has to be under 475000 in the suburb I'm looking to buy which cuts out 95 percent of houses.

  • Wizard on 21/07/2020 - 15:07
    +3

    Got my popcorn. Now wait for the house of cards to come crashing down.

  • ellave on 21/07/2020 - 15:10
    +2

    The UK have abolished stamp duty till the end March for under GBP500k, wish they would just do the same here.

    • cwongtech on 21/07/2020 - 17:10

      They have to pay for the Votekeeper/VoteSeeker package somehow..

  • Drakesy on 21/07/2020 - 15:10
    +3

    5% equity will evaporate in a second.
    Terribly thought through policy, there's a reason why you need a deposit to buy a house.
    Basically the government guaranteeing house prices with taxpayers money.

  • ssjwill on 21/07/2020 - 15:12
    +1

    bachelor of spam

  • AAN on 21/07/2020 - 15:12

    For this scheme I have pre-approval from cwb on below rates
    Initial annual percentage rate* 3.13% p.a.
    (Based on current interest rates which are subject to change)

    now i am considering if i should look at NAB who are also part oft his scheme

    • hodgeyhodgey on 21/07/2020 - 15:51

      Is that owner-occupied and P&I?

      • MadgeH on 21/07/2020 - 16:06
        +1

        Yeah must be. The FHLDS is only open to owner occupiers and P&I repayments (and first home buyer Aussie citizens)

        • hodgeyhodgey on 21/07/2020 - 19:40

          Cheers mate, I probably should've known that but didn't think to do a quick google!

    • beyondtool on 22/07/2020 - 10:33
      +1

      I would be looking further, no bank should be charging over 3% interest rate in the current climate. With the 20% deposit secured by the government you should be able to score a low 2% rate with many lenders. That is if the FHLDS playing field is really even.

  • Orico on 21/07/2020 - 15:34
    +1

    Get in before all the Mega Rich Hong Kongers come to Sydney and buy up all the nice properties and push up the house & apartment prices with their shiny new Visas.

  • soan papdi on 21/07/2020 - 15:58
    +1

    Brain dead schemes like this only serve to put money in the pockets of builders and developers. No need of LMI? Well, the lender is going to charge a higher home loan interest which will likely end up costing buyers a lot more than the LMI.

    Lenders mortgage insurance (LMI) protects your lender if you can't repay your mortgage
    https://www.finder.com.au/home-loans/lenders-mortgage-insura…

    Banks want to protect themselves if a buyer defaults, so the buyer has to pay the premium for this insurance? How does that work? (answer: the banks fleece the buyer and the govt makes it legal)

    • AssociatedJohnKKMK @ Mortgage Better on 21/07/2020 - 16:12

      Hi ggop,
      thanks for your message, but many banks typically charge the same interest rate for these deals as an 80% deal given it's guaranteed by the government.

      • soan papdi on 21/07/2020 - 16:15
        -2

        Does "typically" mean they sometimes don't? I have nothing against you, just not happy with the govt propping up house prices for no long term benefit

        • El-Rhi on 22/07/2020 - 06:58

          All participating banks have agreed not to charge higher interest rates. This was part of the governments selection of participating banks.

  • sunnyc on 21/07/2020 - 16:14
    +3

    First home buyer is a scam. Don’t fall for it.

    • Amr911 on 21/07/2020 - 22:00

      Why scam?

  • Flintz on 21/07/2020 - 16:34

    This scheme was snapped up within a week before so surprised there's still spots open. Property market must be very slow without those overseas buyers to rally behind

    • AssociatedJohnKKMK @ Mortgage Better on 21/07/2020 - 17:40

      yes it's very popular, but some spots still left.

      • Flintz on 21/07/2020 - 18:01

        Was

        • AssociatedJohnKKMK @ Mortgage Better on 22/07/2020 - 09:35

          no still left. confirmed this morning.

  • nagel on 21/07/2020 - 17:29
    +1

    Time to become a citizen…

  • [Deactivated] on 21/07/2020 - 18:33

    Why is this even a post? Rep isn't offering a deal, he's just posting about a government scheme so he can spam his business. Surprised mods haven't removed this yet (actually come to think of it this "rep" does a lot of spamming mortgage "deals" with his contact details even though you can get the same deal direct).

  • temporiser on 21/07/2020 - 19:02

    Is there any lenders that will give first home buyers 89% LVR and not charge LMI at a interest rate starting with a 2?

    • soan papdi on 21/07/2020 - 21:59

      Well I posted the same opinion above and am being negged. OP's statement was many banks typically charge the same interest rate for these deals. It is hard for me to believe this free money will be left alone by the lender or developer. Either the bank will charge a higher interest for a high-risk client or the developer will find some excuse to raise the price for this buyer.

      • [Deactivated] on 22/07/2020 - 08:13

        The government is actually going guarantor for the first 20% of the loan. So in the event of default, it's treated the same as if you put up 20% yourself. A higher interest rate is totally unnecessary because the bank isn't taking on any higher of a risk.

        • AssociatedJohnKKMK @ Mortgage Better on 22/07/2020 - 09:34

          That's exactly correct. although the bank can determine what they wish to do, I have lenders that the treating this the same as a 20% deposit loan given the government is guaranteeing.

  • belongsinforums on 21/07/2020 - 20:37

    link is dead

  • Amr911 on 21/07/2020 - 22:01

    "Must be Australian citizen" …i was told before that PRs can benefit from it…not sure though

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