first home buyers
Having your own place is the Aussie dream, and for first home buyers, there are grants and incentives that make the dream more accessible than ever!
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Buying your first home doesn’t have to be daunting. Yes, you have to save a deposit, and there’s always more research to do. But did you know there’s help available?
Low deposit mortgages, stamp duty concessions and government grants up to $20k all make the dream of owning your own home possible.
Even if you aren’t ready to build just yet, we’ve put together some useful info about the current incentives that can make getting your first home a little easier.
101: home buyer questions
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The First Home Owner Grant (FHOG) is a tax-free government payout you can put towards your first new home. It’s easy to access but only available when you build or buy a brand new home – it doesn’t apply if you buy an existing home.
It’s a great offer that means you get a leg up on designing and building the exact home you want, while saving money on not having to renovate or maintain an older house.
It depends on where you live. Check out our table below to see how much the grant is worth in your state:
|Queensland (metro areas)||$15,000|
|Queensland (regional areas)||$20,000|
|New South Wales||$10,000|
|Victoria (metro areas)||$10,000|
|Victoria (regional areas)||$20,000|
The FHOG is paid to people who are buying or building their first new home. To get your hands on the grant you need to meet a few basic requirements. You must be:
- A natural person – not a company or trust
- 18 years or older
- An Australian citizen or permanent resident
On top of that, the new house you build or buy must be:
- House and land valued at less than $750,000
- Your primary residence – i.e. not an investment property
You or spouse won’t be eligible for the FHOG if:
- You own, or have previously owned, a home in Australia
- You have previously received a FHOG from any Australian state
Yes it can! You’ll receive the money at different times depending on whether you’re building or buying, so check with your lender to make sure you’ll have it in time to put it towards your deposit.
To apply for the grant you can either:
- Apply on your own through your state Revenue Office, or
- Apply through your lender who will submit your application on your behalf
We recommend letting your lender handle your application. They know what they’re doing and can keep the whole process on track so that the money is there when you need it.
The First Home Owner Grant scheme gets reviewed every year when your state government releases its budget. That means the value of the grant can change, or even that it might be cut from the budget entirely.
To avoid missing out we advise our customers to get started on purchasing their first new home as soon as they’re able to.
Stamp duty is a government tax that you pay up front when you buy a house. It’s calculated as a small percentage of the purchase price. Each state charges slightly different amounts.
Yes, in some cases they are. See the table below to find out what exemptions first home buyers are entitled to:
|State||Exemption Available||Concession Available|
|Queensland||None||For homes $549,999 or less|
|New South Wales|
For new homes $799,999 or less
For existing homes $649,999 or less
For new homes $800,000 – $1,000,000
For existing homes $650,000 – $800,000
|Victoria||For homes $600,000 or less||For homes $600,001 – $750,000|
*Although Queensland has no exemption, there’s an additional concession on buying a primary residence up to $1,000,000. It means first home buyers typically don’t pay any stamp duty on homes up to $500,000.
low deposit loans
Lenders usually ask for a 20% deposit when you sign up for a mortgage. A low deposit is anything less than that 20%. Banks and lenders know that inflation has made it hard to save such large amounts and are willing to work with customers whose deposits are as low as 5%.
Yes, with a smaller deposit you’ll pay a slightly higher interest rate.
The upside is once you’ve repaid some of your loan, you’ll be able to renegotiate a lower rate with your lender. That means low deposit options are still a cost-effective way of getting your own place compared to what you would spend on rent and expenses while waiting and saving a larger deposit.
lenders mortgage insurance
Lender’s Mortgage Insurance (LMI) is a type of insurance that protects lenders from losing money if you sell your home for less than you owe on the mortgage. So, if you sold your home with $500,000 still owing, but only got $475,000 for it, your LMI policy would pay the remaining $25,000 to your lender.
LMI protects you and your lender from any shortfall when it comes time to sell.
LMI is only paid on low deposit home loans. It’s a one-off fee that you can either:
- Pay up front as a lump sum, or
- Add it to your mortgage total and pay it off as part of your normal repayments
If you want to add the fee to your mortgage total then make sure to ask your lender about their policies regarding LMI fees.
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