It’s taking young couples roughly five years on average to save for a 20% home loan deposit, according to new research. Want to hear something crazy, though? We know how to quarter that timeframe…

Real talk: it’s never been tougher to save up a deposit for your first home.

In Sydney the average timeframe is 8+ years. In Melbourne 6.5 years. And most other places across the country, 4 to 6 years. 

That is unless you happen to know a finance professional who can help first home buyers purchase a home with just a 5% deposit – and not pay any lender’s mortgage insurance in the process.

And how do we do that?

Well, if you’re eligible, we can hook you up with the First Home Guarantee (FHG) scheme – which will release 35,000 places from July 1 (more on this below).

By getting in early on this scheme and reserving a spot, you can quarter the amount of time it takes you to save up for your first home deposit.

Don’t believe us, check out these stats

Below you’ll see how long it’s currently taking first home buyers across the country to save for a 20% home loan deposit (according to Domain data), compared to saving just 5%.

Sydney: 8 years 1 month (20%), down to 2 years (5%).
Melbourne: 6 years 6 months (20%), down to 1 year 7 months (5%).
Brisbane: 4 years 10 months (20%), down to 1 year 3 months (5%).
Adelaide: 4 years 7 months (20%), down to 1 year 2 months (5%).
Perth: 3 years 7 months (20%), down to 11 months (5%).
Hobart: 5 years 10 months (20%), down to 1 year 5 months (5%).
Darwin: 4 years 3 months (20%), down to 1 year (5%).
Canberra: 7 years 1 month (20%), down to 1 year 9 months (5%).
Combined capital cities: 5 years 8 months (20%), down to 1 year 5 months (5%).
Combined regionals: 3 years 10 months (20%), down to 11 months (5%).
Australia-wide: 4 years 5 months (20%), down to 1 year 1 month (5%).

So if you’ve been saving towards a 20% for at least a year, you could be ready to hit the ground running when the 35,000 FHG schemes become available on July 1.

Tell me more about the First Home Guarantee scheme!

Ok, so the First Home Guarantee scheme (previously the First Home Loan Deposit Scheme) allows eligible first home buyers to build or purchase a home with only a 5% deposit, without forking out for lenders’ mortgage insurance (LMI).

This is because the federal government guarantees (to a participating lender) up to 15% of the value of the property purchased.

Not paying LMI can save buyers anywhere between $4,000 and $35,000, depending on the property price and deposit amount (it’s also worth noting that property price caps apply).

But places in this scheme are on a first-come, first-served basis.

So don’t let the recent expansion to 35,000 spots lull you into a sense of complacency.

They’ll go fairly quickly, which means if you’re interested you’ll want to get in touch with us asap to ensure you’re ready to lodge the application come July 1.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

First home buyers, regional buyers and single parents keen to crack the property market are the big winners in this year’s federal budget – with 50,000 low deposit, no LMI scheme spots up for grabs. 

Want to buy your first home with just a 5% deposit and pay no lenders’ mortgage insurance? 

You could be in luck – the federal government is expanding its hugely popular First Home Guarantee scheme to 35,000 places from July 1, 2022.

First home buyers who use the First Home Guarantee scheme fast track their property purchase by 4 to 4.5 years on average, because the scheme means they don’t have to save the standard 20% deposit.  

The government usually issues just 10,000 spots for the First Home Guarantee every July 1, but next financial year it’s upping the ante.

It’s worth noting that the similar New Home Guarantee scheme for first home buyers (10,000 spots for new builds only), isn’t expected to continue next financial year.

However, regional buyers (10,000 spots) and single parents (5,000 spots) will benefit from similar schemes, which we’ll run through in more detail below.

But first, what’s the First Home Guarantee scheme?

Ok, so the First Home Guarantee scheme (previously the First Home Loan Deposit Scheme) allows eligible first home buyers to build or purchase a home with only a 5% deposit, without forking out for lenders’ mortgage insurance (LMI).

This is because the federal government guarantees (to a participating lender) up to 15% of the value of the property purchased.

Not paying LMI can save buyers anywhere between $4,000 and $35,000, depending on the property price and deposit amount.

But places in this scheme are on a first-come, first-served basis.

So don’t let the expansion to 35,000 spots lull you into a sense of complacency.

They’ll go fairly quickly, which means if you’re interested, you’ll want to get in touch with us asap to ensure you’re ready to hit the ground running come July 1.

The new Regional Home Guarantee

Regional homebuyers will benefit from the announcement of the Regional Home Guarantee.

Under the scheme, 10,000 guarantees each year (from 1 October 2022 to 30 June 2025) will be made available to support eligible regional homebuyers.

The good news is that this scheme will also be made available to non-first home buyers, and permanent residents, to purchase or construct a new home in regional areas.

Details on this scheme are still fairly limited, though. 

For example, it’s not confirmed in the budget papers or ministerial statements whether it will be a 5% deposit scheme like the first home buyer one.

And what’s classified as a “regional area” hasn’t been disclosed yet, but rest assured we’re watching this space closely.

Family Home Guarantee for single parents

For single parents, 5,000 guarantees will be made available each year from July 1, expanding upon the Family Home Guarantee announced in last year’s budget.

The Family Home Guarantee can be used to build a new home or purchase an existing home with a deposit of as little as 2%, regardless of whether the single parent is a first home buyer or has owned property before.

Previously, it was planned that just 2,500 spots would be up for grabs each year over four years, so it’s good to see the federal government expand this scheme until June 2025.

Get in touch today to get the ball rolling

With these schemes, allocations are generally snapped up fast.

So if you’re a first home buyer, regional buyer, or single parent looking to crack into the property market sooner rather than later, get in touch today and we can explain the schemes to you in more detail and help check if you’re eligible.

And when the spots do become available over the next few months, we’ll be ready to help you apply for finance through a participating lender.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Construction costs just rose at the fastest annual pace since 2005. So why is it getting so expensive to build your own home? Today we’ll look at the materials that are becoming more expensive and why all homeowners should take note – not just renovators and builders.

“Your grandpa built this place with his own two hands”, or so your dad used to boast.

So if Pop could do it with his trusty hammer, some nails, and a bit of hard yakka, why is it so expensive to build a home of your own these days? (Your own handiwork inadequacies aside…)

Well, for starters, national construction costs increased 7.3% in the 2021 calendar year alone, which was the highest annual growth rate since March 2005.

And the not-so-great news is that property market data company CoreLogic is expecting growth in residential construction costs to remain above average over the coming quarter as supply chain disruptions persist.

“There is a significant amount of residential construction work in the pipeline that has been approved but not yet completed,” explains CoreLogic research director Tim Lawless.

So what materials are getting more expensive and harder to source?

Data shows that cost increases are being driven primarily by timber (mostly structural timber).

In fact, in the final quarter of 2021, the value of select wood imports reached their highest level on record, says Housing Industry Association (HIA) economist Thomas Devitt.

“Timber is predominantly produced domestically but excess demand, such as in a boom year like 2022, is largely sourced from overseas markets,” says Mr Devitt.

Other segments of the market also remain volatile, with increasing pressure currently on metal costs.

“With some materials such as timber and metal products reportedly remaining in short supply, there is the possibility some residential projects will be delayed or run over budget,” adds Mr Lawless.

And with building approvals for detached housing recording their strongest year on record in 2021 (with 150,000 approvals), demand isn’t expected to slow down anytime soon.

“This boom is set to keep builders busy this year and into 2023,” adds Mr Devitt.

Mr Lawless says: “With such a large rise in construction costs over the year, we could see this translating into more expensive new homes and bigger renovation costs, ultimately placing additional upwards pressure on inflation.”

Why current homeowners should also take note

Higher construction costs are likely to add to affordability challenges in the established housing market, making it harder for homeowners to upgrade.

And CoreLogic Head of Insurance Solutions Matthew Walker warns that higher building costs mean homeowners and property investors should also review their insurance cover.

“In these times of rapidly rising home and construction costs, under insurance can quickly become a real threat to what is a most valuable asset,” says Mr Walker.

“It’s important that homeowners keep track of their sum insured and annually check that it is sufficient should the worst occur by using their insurer’s rebuild calculator or giving them a call.”

How to get the right kind of finance for a construction project

Finding the right kind of finance for a construction project can be tricky at the best of times – let alone when building supplies are becoming more expensive and wait times are blowing out due to supply constraints.

That’s why it’s important to team up with a professional like us when looking for a construction loan.

Not only can we help you secure a great rate, but we can also help you select a loan that allows flexibility for any unforeseen contingencies.

So if you’d like to explore your options for your next building or reno project, then get in touch today – we’d love to help you map out a plan for your 2022 building and property goals.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Want to buy your first home with a deposit of just 5% and pay no lenders’ mortgage insurance? You could be in luck – the federal government will soon reissue up to 4,651 unused Home Guarantee Scheme spots.

First home buyers who use the Home Guarantee Scheme fast track their property purchase by 4 to 4.5 years on average, because the scheme means they don’t have to save the standard 20% deposit.

The government usually issues spots in the scheme once a year (July 1), but this time it’s reissuing guarantees that went begging earlier.

Where are these extra spots coming from?

The government states the scheme will reissue “up to” 4,651 unused guarantees for first home buyers from the 2020-21 financial year.

It adds many of the spots have been unused because of COVID disruptions, but it’s unclear exactly how many guarantees will be made available.

It’s also unclear exactly when the spots will be reissued, with the government entity overseeing the scheme – the NHFIC – saying it’s working with its panel lenders and “looks forward to reissuing unused guarantees soon”.

All in all, that means we’re going to have pretty short notice of when these spots officially become available to apply for, and they could be in short supply.

So if the guarantee is something you’re interested in, you’ll want to get in touch with us today so we’re ready to act when the spots do drop.

Back up, what’s the Home Guarantee Scheme?

Ok, so the Home Guarantee Scheme is broken up into three separate schemes: two for first home buyers, and one for single parents called the Family Home Guarantee scheme.

At this stage, it’s believed (but not confirmed) that the reissued spots will mainly be for the first home buyers through the New Home Guarantee scheme (new builds) and First Home Loan Deposit Scheme (includes existing builds).

These two schemes allow eligible first home buyers to build or purchase a home with only a 5% deposit, without forking out for lenders’ mortgage insurance (LMI).

This is because the federal government guarantees (to a participating lender) up to 15% of the value of the property purchased.

Not paying LMI can save buyers anywhere between $4,000 and $35,000, depending on the property price and deposit amount.

There are price caps on eligible properties, ranging from $950,000 for new builds in Sydney, ​​Newcastle, Lake Macquarie and Illawarra, down to $350,000 for existing properties in regional South Australia.

A full list of the price caps can be found here.

Get in touch today to get the ball rolling

With these schemes, allocations are generally granted on a “first come, first served” basis.

And it’s worth re-iterating that spots this time will be limited and will likely fill up fast.

So if you’re a first home buyer looking to crack into the property market sooner rather than later, get in touch today and we can explain the schemes to you in more detail.

And when the reissued spots become available, we can help you apply for finance through a participating lender.

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.

Open banking is here and it’s charging full steam ahead. So just how are lenders and fintechs using your shared data in this brave, new, data-fuelled world? A new report has shed some interesting insights.

With all that’s gone on over the past two years, one of the nation’s biggest banking overhauls in recent memory has slipped under the radar.

It’s called ‘open banking’, and it aims to allow you to easily and securely share your banking data with your bank’s competitors to make it more convenient for you to switch banks when you think you’ve found a better deal on a financial product.

For example, instead of spending hours and hours gathering documentation (such as bank statements, expenses, earnings and identification documents) to refinance your home loan, you could simply request that your current bank sends the info across for you.

But, like most things, it comes with a trade-off: you’ve got to share your banking data with the prospective lender, fintech or allied professional to make it happen.

So just how do they use your data?

Australian open banking provider Frollo has just published the second edition of its yearly industry report, The State of Open Banking 2021, which surveyed 131 professionals representing banks and lenders, fintechs, technology providers, and brokers across the country.

The report shows open banking data availability has accelerated dramatically.

In the first 10 months of 2021, 70 banks started sharing consumer data and 14 businesses became accredited data recipients – including three of the four big banks.

This is an increase from just five data holders and five data recipients in 2020.

And more financial institutions are getting ready to jump on board.

The industry survey shows 62% of respondents plan to use open banking data within the next 12 months, and 38% within the next 6 months.

So what are they using the open banking data for?

Well, the most popular uses can be grouped into three categories:

– Lending: income and expense verification is highly valued by 59% of survey respondents.

– Money management: multi-bank aggregation and personal finance management were highly valued by 50% of respondents.

– Verification: customer onboarding (49%), identity verification (38%), account verification (34%) and balance checks (30%) were all highly valued.

For open broking, get in touch

Now, it’s important to note that open banking isn’t the only way you can make life easier on yourself when it comes to switching up financial products.

That’s what we’re here for!

We’re an open book – always happy to check whether you can apply for a better deal on your home loan somewhere else.

And as you know, we pride ourselves on taking on the vast majority of the legwork, whether we’re harnessing the power of open banking or not.

So if you’d like to explore your options, get in touch today – we’d love to help you out!

Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.