Saving as a First Home Buyer in 2021

Why the time to buy is now

It’s a great time to be a first home buyer!

With interest rates at a historical low, and the 2021-2022 Federal Budget announcement of more government assistance to first home buyers, now is a great time to get sorted. In Victoria, you can get up to $10k (or $20k if you live in Geelong and buy before 30 June 2021).

The cherry on top comes with the Government’s extension of their New Home Guarantee which will see first home buyers securing a home loan with a 5% deposit without paying a dime in Lenders Mortgage Insurance!

So what else is there? We’ve highlighted below some other grants and incentives that are helping first home buyers get into the property market, however this advice is general and does not take into account your objectives, financial situation or needs. You should consider whether the advice is suitable for you and your personal circumstances.

Secure a home loan with just 5% deposit with the First Home Loan Deposit Scheme

Does saving a 20% deposit seem out of reach for you? The New Home Guarantee scheme is here to help!

The recent 2021-2022 Federal Budget announcement means an extra 10,000 first-home buyers will be able to purchase their new home with deposits as low as 5 per cent. It also means you don’t have to pay that annoying Lenders Mortgage Insurances which could save you $20k if you’re looking at a $550k loan.

More information on the scheme is expected to be announced this week.

You could be eligible for the $10k or $20k First Home Owners Grant!

The First Home Owners Grant has been incredibly popular among millennials over the past couple of years. This grant sees first home buyers in Victoria receive $10,000 for building new homes valued up to $750,000 (or $20,000 if you’re in regional Victoria and buy before 30 June 2021) as well as stamp duty concessions. But there are some conditions that have to be met before a home buyer can apply for the grant, so it’s important you’ve done your research and know what you’re eligible for.

To understand more on the First Home Owner grant, click here.

Keep in mind that like all government schemes, they are subject to change. So get the latest information from the State Revenue Office website relevant to your State.

First Home Super Saver Scheme increased to $50k

The First Home Super Saver Scheme has increased the maximum amount of voluntary contributions that can be released from $30,000 to $50,000. It means that you’ll be able to release $50,000 from your super funds as long as you are going to live in the property you buy with the proceeds.This is appealing to many who are set on buying their new home due to the tax benefits of Super.

Click here to understand more about the First Home Super Saver Scheme.

Receive up to 50% in stamp duty concessions!

First home buyers previously only qualified for a complete duty exemption if the property value was under $600,000 where there was a sliding scale of concession available for homes over that and valued up to $750,000. With the announcement of the Federal 2021/22 Budget, now you can combine that with the 25% or 50% stamp duty discount until 30 June 2021. So make sure you get in quick!

Interest rates the lowest in history

Low interest rates mean low repayments, and we love to see it! Our finance partner, Mortgage Advice Bureau, have seen historically low fixed interest rates of 1.89% for two years (comparison rate 3.19%)* and this is great news for first home buyers.

The lowering of repayments allows for greater borrowing capacity, so first home buyers have more choice when it comes to purchasing the property they’re after. While lenders will still work with a buffer just in case interest rates rise – interest rate rises aren’t likely to happen any time soon.

*1.89% fixed for 2 years (comparison rate 3.19%)*  is based on lowest market interest rate currently advertised and may be subject to change. This figure is a guide only and Porter Davis will not be held responsible for customer’s ability to obtain this rate. *WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Please speak to our MAB representative for details.

Time to speak to the experts!

With all this said, this advice is general in nature and does not take into account your objectives, financial situation or needs. You should consider whether the advice is suitable for you and your personal circumstances.

If you are thinking of purchasing a home, seek independent legal, financial, and taxation advice before acting on any information in this article.

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