When you’re watching Downton Abbey with your parents on a Saturday night, saving for a house deposit can feel like a sad and lonely affair. But it doesn’t have to be — and you don’t have to go it alone. In fact, there a tonne of people that have your back.
We spoke to Mortgage Choice broker Tim to find out what tools can get those keys in your hands faster than you can say ‘wingardium leviosa’.
First Home Owner Grant
It feels pretty rare that the government gives you money but when it comes to first home buyers, they’re happy to fork out the cash.
If you intend to live in your home, you may be eligible for the First Home Owner Grant (FHOG). This is a one-off payment provided by the government to first-time buyers. It ranges from $7,000 to $26,000 and in many states is only available for new or off-the-plan properties but the criteria vary from state to state so it’s worth looking into.
Stamp duty waivers
You know stamp duty, that HUGE tax you have to pay when you purchase a property? Well, the government is willing to waive it (or a portion of it) on some home loans for first-time buyers. In Sydney, for example, they’ll waive stamp duty on new homes under $600,000 and grant concessions on those under $850,000 but once again, the criteria in each state differs so you’ll need to check if you’re eligible.
First Home Super Saver Scheme
The First Home Super Saver Scheme (FHSS) allows first home buyers to save for a deposit in their superannuation fund. How it works is, individuals opt to have a portion of their pre-tax income salary sacrificed into their super, which is then taxed at the regular super rate of 15%. First home buyers can then access the funds they have contributed to use for a house deposit at a later date.
Up to $15,000 in contributions can be made in one financial year and $30,000 in total, however if you’re buying a property with a partner who also meets the eligibility criteria, you can both utilise the FHSS, giving you $60,000 towards your purchase.
Financial Fitness Boot Camp
Mortgage Choice’s Financial Fitness Boot Camp is a FREE online education tool for home buyers. With tips for first home buyers, investors, home upgraders and mum and dad investors, it’s the place to find the inspiration and advice you need to navigate the treacherous landscape of home buying.
Guarantor loans
Your parents (or a kind, wealthy friend) can go guarantor on your home loan, meaning they agree to use the equity in their own property as security on the loan (or a portion of it) in the event that you can’t meet the repayments. In some cases, the lender will also look at your parents’ income to assess the serviceability of the loan.
“[Guarantor loans] are perfect for those who cannot raise a deposit fast enough and want to avoid mortgage insurance. This is extremely popular with parents offering equity in their own homes to assist their kids,” says Tim.
High-interest savings accounts or term deposits
Maximise your savings by keeping it in a high-interest savings account or term deposit. Look for a savings account with a high base and/or bonus interest rate that isn’t too easy to access and if you opt for a term deposit, make sure you won’t need the funds within the fixed time frame.
“Always shop around for the best term deposits and savings accounts with no fees,” says Tim.
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