{"id":5310,"date":"2023-08-31T09:55:26","date_gmt":"2023-08-30T23:55:26","guid":{"rendered":"https:\/\/financialplus.com.au\/?p=5310"},"modified":"2023-08-31T09:55:26","modified_gmt":"2023-08-30T23:55:26","slug":"low-deposit-first-home-buyers-now-have-82000-in-equity","status":"publish","type":"post","link":"https:\/\/financialplus.com.au\/low-deposit-first-home-buyers-now-have-82000-in-equity\/","title":{"rendered":"Low deposit first home buyers now have $82,000 in equity"},"content":{"rendered":"
It\u2019s been three years since the First Home Loan Deposit Scheme was launched, and while it\u2019s known today as the Home Guarantee Scheme (HGS), it\u2019s still helping first home buyers get into the market with just a 5% deposit and no lenders\u2019 mortgage insurance (LMI).<\/p>\n The HGS attracted criticism from some circles \u2013 some pundits pointed to the low deposit as a stumbling block that could land homeowners in trouble if property values fell or interest rates rose.<\/p>\n It turns out both have happened, yet first homeowners haven\u2019t let it hold them back.<\/p>\n New data from the\u00a0National Housing Finance and Investment Corporation<\/a>\u00a0(NHFIC), which runs the HGS, shows that first buyers who tapped into the 5% deposit scheme are now sitting on impressive piles of equity.<\/p>\n On average, these first-time homeowners have racked up $82,000 in home equity.<\/p>\n It\u2019s a great result, especially when you consider that the average first home deposit across the scheme was just $35,200 in 2020, rising to $36,400 in mid-2023.<\/p>\n Compare that to the average deposit of $159,000 across the broader first-home buyer market, and it\u2019s easy to see how the 5% deposit scheme gives first-home buyers a valuable leg-up into the market sooner.<\/p>\n Getting a deposit together can be a massive hurdle when buying a home.<\/p>\n Research by Finder<\/a>\u00a0shows it can take 12 years for a young Australian to save a deposit for an average-priced apartment, or 16 years to accumulate the deposit for a house.<\/p>\n But if your deposit is lower than 20%, you can get stung with LMI, which can cost you anywhere between $4,000 and $35,000, depending on the property price and your deposit amount.<\/p>\n But through the NHFIC, the federal government has three low deposit, no LMI schemes \u2013 all under the HGS umbrella.<\/p>\n The first two, the\u00a0First Home Guarantee<\/a>\u00a0and\u00a0Regional First Home Buyer Guarantee<\/a>, support eligible buyers to purchase a home with a low 5% deposit and no LMI.<\/p>\nFirst home buyers who bought into the market using the federal government\u2019s 5% deposit scheme have racked up $82,000 in home equity on average, new data shows.<\/strong><\/p>\n
From $35,000 deposit to $82,000 home equity<\/h3>\n
What is the Home Guarantee Scheme?<\/h3>\n