Broker aggregator National Mortgage Brokers (nMB) has praised the federal government’s decision to extend the New Home Guarantee Scheme, allowing thousands more people to access the property market.
The announcement to boost the scheme comes ahead of the 2022 Federal Budget to be outlined on Tuesday night.
nMB managing director Gerald Foley (pictured) said brokers would benefit from the revamped scheme.
“Being able to provide a broader range of solutions to more borrowers will help brokers assist more customers,” Foley said. “Based on broker market share, you can expect two-thirds of applicants will choose a broker.”
“Having brokers being able to provide loans under the scheme is very important as many of these borrowers will need the extra time, choice, and support brokers provide.”
The government initiative supports eligible first home buyers to purchase their first home sooner and has been extended to June 30, 2022, with an additional 10,000 places available.
The program currently offers 35,000 places per year under the First Home Guarantee (previously the First Home Loan Deposit Scheme) and allows people to place a 5% deposit without paying lenders mortgage insurance.
The lender can guarantee a maximum balance amount of 15% of the value of the property which is not considered a cash payment or deposit for a home loan.
Read more: First Home Loan scheme enters new phase
Ahead of the Federal Budget announcement, Foley said a sitting government delivering its last budget before the election and in such turbulent times globally meant an interesting balancing act to keep voters happy.
“It feels like we will see a big spending budget with a focus on infrastructure and jobs to bring us out of the past few years’ slowdown, and maybe even a few old-fashioned cash hand-outs,” he said. “The flow-on to increased demand for spending, jobs and services will be good for brokers.”
Two new government schemes will also be introduced to help Australian home buyers.
The Family Home Guarantee Scheme will offer 5,000 places per year to single parents to place a 2% deposit on a property.
The Regional Home Guarantee scheme will offer 10,000 places per year and is designed to encourage construction outside of capital cities. It will be available to first home buyers, people who have not owned property within the last five years, and permanent residents.
Eligible New Home Guarantee properties include newly constructed dwellings, off-the-plan dwellings, house and land packages, and land and a separate contract to build a new home.
Depending on which type of home is being built or purchased, different timeframes apply for the client’s place on the scheme.
Below are the price caps for capital cities, large regional centres, and regional areas.
|
State/Territory |
Price cap in capital city (and major regional centres in NSW, VIC and QLD) |
Price cap in the rest of the state/territory |
|
NSW |
$800,000 |
$600,000 |
|
VIC |
$700,000 |
$500,000 |
|
QLD |
$600,000 |
$450,000 |
|
WA |
$500,000 |
$400,000 |
|
SA |
$500,000 |
$350,000 |
|
TAS |
$500,000 |
$400,000 |
|
ACT |
$500,000 |
N/A |
|
NT |
$500,000 |
N/A |
