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Has the FHLDS made home ownership easier?
Despite the recent introduction of the First Home Loan Deposit Scheme, prospective home owners still believe it is impossible to get onto the property market, new research has suggested.
Has the FHLDS made home ownership easier?
Despite the recent introduction of the First Home Loan Deposit Scheme, prospective home owners still believe it is impossible to get onto the property market, new research has suggested.
According to survey data from Mortgage Choice, 90 per cent of Millennials believe it is harder than ever to get into the property market.
Speaking about the survey findings, Mortgage Choice CEO Susan Mitchell said “it’s unsurprising that the vast majority of first-time buyers feel it is impossible to get into the property market”.
“With property prices on the rise again, saving for a home loan deposit can seem like an insurmountable goal,” Ms Mitchell said.
The FHLDS was introduced as an initiative by the federal government to address the housing affordability crisis and allows 10,000 eligible first home buyers the opportunity to buy their first home with a deposit of as little as 5 per cent without incurring lenders’ mortgage insurance.
FHLDS reservation places are given on a first come first serve basis, with the first 3,000 places taken in and the remaining 7,000 available from 1 February 2020. A further 10,000 guarantees will be available from 1 July 2020.
“Often hailed as the biggest hurdle to home ownership, saving a 20 per cent home loan deposit could seem like a thing of the past for some first-time buyers.”
“A new measure introduced by the federal government to improve housing affordability grants a group of first-time buyers the opportunity to get on the property ladder sooner, but getting a place in the scheme might be as unlikely as securing a winning lottery ticket,” Ms Mitchell said.
The Mortgage Choice CEO said that while the scheme is a good initiative that can help Australians fulfil their property ownership goals, a few considerations need to be made.
“Of course, first-time buyers who cannot secure a place in the scheme may still be able to get a home loan with a 5 per cent deposit if they pay lender’s mortgage insurance, but they may end up paying more interest over the life of the loan as a consequence,” Ms Mitchell said.
“Furthermore, those who buy a home using the scheme will need to make a commitment to live in the property as they cannot change the terms of the loan,” she concluded.
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