Help To Buy Sceme - Mortgage Domayne

Help To Buy Sceme

October 21, 2023

Welcome to the finance update for the week ending 21 October, 2023.

During the week, analysts suggested that the competition between lenders to get your business could soon be heating up again.

The nation’s biggest bank has lost market share in the residential lending space (including owner-occupier and investor home loans) for the first time in more than five years.

Analysts believe CBA won’t allow its market share to shrink much further, and hence trigger a fresh round of competition amongst the lenders – watch this space!

In this week’s newsletter, we take a look at the latest government assistance package for home buyers, the creatively names Help To Buy scheme.

Last month the states and territories agreed to the shared equity scheme that will see the the federal government contributing up to 40% of the cost of a new home, and 30% for an existing home, to 10,000 eligible buyers per year.

How does it work?

It is what’s known as a “shared equity scheme” and was part of the 2022 federal government election commitment. It means you can co-buy a home, with the government offering a helping hand.

The scheme will give people an “equity contribution” of up to 40 per cent of the cost of a new home, or 30 per cent for existing homes, and can be a house, unit or townhouse.

Importantly, the buyer won’t need to pay rent on the stake owned by the government.

The scheme will run for four years, beginning some time in 2024, and support 40,000 low- and middle-income families to finally secure a place to call home.

Who is eligible for the scheme?

  • You have to be an Australian citizen, at least 18 years of age.
  • Yearly income must be $90,000 or less for individuals, or $120,000 or less for couples.
  • You must live in the purchased home.
  • You must not currently own any other land or property in Australia or overseas, but it doesn’t have to be your first home.
  • The required minimum is a 2 per cent deposit of the home price, and the purchaser must be able to finance the remainder of the loan, as well as prove they can also pay for all associated up-front costs, such as stamp duty, legal fees and bank fees.

What are the price caps?

There is a limit on how much you can bid for in each state, depending on the median house price.

If you or any of your clients would like any more information about this new scheme, please call us on 1300 366 296 to discuss.

Any changes in interest rates from last week are highlighted in orange.

Note – Increases announced by lenders as a result of RBA decisions normally take 1-2 weeks to come into affect.

Variable

The rates below are based on a $500,000 loan, with the borrower making principle and interest payments with a loan term of 30 years. The rates quoted may vary depending on the borrowers LVR.

1 Year Fixed

The rates below are based on a $500,000 loan, with the borrower making principle and interest payments with a loan term of 30 years. The rates quoted may vary depending on the borrowers LVR. At the end of the three year fixed period, the borrowers interest rate will revert to a standard variable rate for the life of the loan.