How Will Labor’s Election Win Affect First Home Buyers?

In light of the federal election results in 2022, first-time buyers and individuals who have bought before but do not already own a home will have the opportunity to acquire a home using a federal government equity loan following the weekend’s election victory.

The Emergence of the “Help to Buy” Initiative

Applicants who have saved a down payment of at least 2% of the purchase price but do not currently own property are eligible for the program.

In other words, even if you’ve already purchased a home, you’ll still be eligible for this program if you don’t own any property at the time of application.

The Labor’s Help to Buy program over the government’s First Home Guarantee might save first-time homebuyers approximately $1000 monthly in mortgage repayments. Still, new modelling reveals that they could give up to $455,000 in equity gains. Only the Coalition will allow first-time homebuyers to tap into their superannuation funds up to $50,000.

As a result, Lenders Mortgage Insurance will no longer be necessary for some situations, and the program will be offered to an additional 10,000 Australians each year.

The Labor Party claims this may save some buyers up to 40% over the loan, requiring a smaller deposit, signing up for a smaller mortgage, and paying less in mortgage repayments for those who qualify for the lower interest rate option.

The federal government will fund up to 40% of a new home’s purchase price and up to 30% of an existing home’s buying price as a loan.

Regional Support for First-Time Homebuyers

Up to 10,000 first-time buyers in the region can purchase a home with just a 5% down payment under this program. The remaining 15% will be guaranteed by the government, eliminating the requirement for lenders’ mortgage insurance.

Customers must meet the same criteria under ‘Help to Buy,’ but income limits are more significant. Up to $125,000 for individuals and up to $ 200 000 for couples are allowed.

According to estimates, purchasing a $700,000 home can save a buyer up to $27,954 in mortgage repayments.

Eligibility Criteria

If you meet the following requirements, you will be eligible for Labor’s ‘Help to Buy’ program:

  • Are at least 18 years of age and an Australian citizen.
  • Earn no more than $90,000 annually, and couples must not earn more than $120,000 annually.
  • You should make your new home your primary dwelling.
  • Deterring yourself from owning any other property outside of Australia
  • Have saved at least 2% of the home’s purchase price in order to qualify for a typical home loan with a participating lender.
  • Spend money on fees like stamp duty and legal and banking expenses. Ongoing property expenses such as property taxes, strata fees, and other fees are also the responsibility of the homebuyer.

The aim of the initiative is to help ease the burden of rising living costs and improve the lives of working families. If you would like to learn more about ‘Help to Buy’, visit the Australian Labor Party website.

Are you a first-time homebuyer who meets the eligibility criteria? If so, don’t hesitate to reach out! Ownit helps buyers inspire the next generation of homeowners.

 

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Andrew Francey

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Andrew has over two decades experience in high growth fast moving consumer goods, agribusiness and professional services. Supporting the Ownit team to deliver on client expectations, and implementing processes to scale the organisation, is a key focus for Andrew.

Andrew is a C-Suite leader with Chairman and Board experience.  He has formal qualifications in Business, Applied Finance and AICD Company Directors Course.

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