It’s on! First home loan deposit schemes open for applications

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If you’d like to buy your first home with just a 5% deposit and pay no lenders mortgage insurance (LMI), then you better act quick, as thousands of first home buyers are expected to rush to apply for the limited spots up for grabs.

And if you’re a single parent with dependent children, a similar scheme now allows you to purchase a home with just a 2% deposit without paying LMI, regardless of whether or not you’re a first home buyer.

In total, there are three federal government schemes that each released a fresh round of 10,000 spots on July 1.

Below we’ll unpack each of the schemes.

The First Home Loan Deposit Scheme (first home buyers)

The First Home Loan Deposit Scheme (FHLDS) allows eligible first home buyers with only a 5% deposit to purchase a property without forking out for 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.

As with the other two schemes below, there are just 10,000 spots available for this scheme this financial year – and in previous years they’ve been allocated within a few months. So you’ve got to get in quick!

The New Home Guarantee scheme (first home buyers)

The New Home Guarantee scheme allows eligible first home buyers to build or purchase a new build with a 5% deposit.

All in all, it’s a fairly similar scheme to the FHLDS.

One of the key differences, however, is that the property price caps are higher (see here), to account for the extra expenses associated with building a new home.

The Family Home Guarantee scheme (single parents)

The new Family Home Guarantee allows eligible single parents with dependants to build or purchase a home with a deposit of just 2% without paying LMI.

Unlike the two schemes above, you don’t have to be a first home buyer to qualify for this scheme.

Here’s a quick example of how it works.

John is a single parent with two young sons, Chris and David. John has found the perfect home for $460,000 but has struggled to save enough for the standard $92,000 deposit (20%) required while paying rent.

However, with the Family Home Guarantee, and on the success of his application with a lender, John could move into his dream home sooner, with just a $9,200 deposit (2%).

Get in touch today

With the three no-LMI schemes now open, we can’t stress enough the importance of applying for them as soon as possible to avoid disappointment.

In recent years the 10,000 spots in the FHLDS have been snatched up within months, and we’ve had more than a few hopeful applicants reach out to us when it’s too late.

So to help avoid disappointment, get in touch with us today and we can help you determine which scheme is most suitable for you, and then help you apply for finance with 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.

EOFY alert! Financial year end just days away

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Small business owners wanting to buy a vehicle, asset or important piece of equipment and immediately write off the cost only have a few days to act this financial year.

Ah, deadlines: love ‘em or hate ‘em, they sure do get you moving.

And with June 30 just days away, time is running out for your business to take advantage of the federal government’s temporary full expensing scheme this financial year.

What is temporary full expensing?

Temporary full expensing is basically an expanded version of the popular instant asset write-off scheme.

It allows businesses that are keen to invest in their future to immediately write off the full value of any eligible depreciable asset purchased, at any cost.

This helps with your cash flow as it allows you to reinvest the funds back into your business sooner.

There is a small catch though: the asset must be installed and ready to use by June 30 in order to be eligible for this financial year.

But rest assured that even if you do order the asset, and then miss the June 30 deadline because it doesn’t arrive in time, you can still write it off next financial year because the scheme is set to run until 30 June 2023.

Asset eligibility

To be eligible for temporary full expensing, the depreciating asset you purchase for your business must be:

– new or second-hand (if it’s a second-hand asset, your aggregated turnover must be below $50 million);

– first held by you at or after 7.30pm AEDT on 6 October 2020;

– first used, or installed ready for use, by you for a taxable purpose (such as a business purpose) by 30 June 2023; and

– used principally in Australia.

Obtaining finance that’s right for your business

Being able to immediately write off assets is all well and good, but if you don’t have access to the funds to purchase them, the scheme won’t be of much use to you this financial year.

So if you’d like help obtaining finance to make the most of temporary full expensing ahead of the impending EOFY deadline, get in touch with us today!

We can present you with financing options that are well suited to your business’s needs now, and into the future.

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.

Aussie businesses load up on light commercial vehicles

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Australian businesses have shifted things up a gear this year, with new asset finance figures revealing a 187% rise in light commercial vehicle purchases since January.

The spike in business vehicle financing was driven by sales of all classes of vehicles, no doubt partly due to SMEs making the most of the federal government’s temporary full expensing scheme (aka instant asset write-off) ahead of June 30.

Here’s a quick snapshot of the Commonwealth Bank’s (CBA) business financing figures by vehicle type:

– Light commercial vehicles increased 187%.
– Utes and vans increased 85%.
– Heavy trucks increased 50%.
– New motor vehicles including passenger and SUVs increased 36%.

“We’ve seen the federal government’s instant asset write-off scheme support many of our customers in the past year,” explains CBA Executive General Manager, Business Lending, Clare Morgan.

“There’s a general expectation that we’ll see an uplift in both financing and registrations of business vehicles as we approach the end of financial year.”

Hold up, what’s this temporary full expensing scheme?

Temporary full expensing is basically an expanded version of the popular instant asset write-off scheme.

It allows businesses, both big and small, to immediately write off any eligible depreciable asset until 30 June 2023 (recently extended from 30 June 2022 in the federal budget).

This can help improve your cash flow as it allows you to reinvest the funds back into your business sooner.

But here’s the catch: the asset must be installed and ready to use by June 30 in order to be eligible for this financial year.

Pedal to the metal before EOFY

If you’d like help obtaining finance that’s gentle on your business’s cash flow, and helps you achieve your long-term goals, please get in touch today so we can help you beat the EOFY deadline.

We work with a broad range of lenders and would love to present you with financing options that are well suited to your business’s needs now, and into the future.

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.

33 suburbs where buyers still have the upper hand over sellers

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Most of Australia may be a seller’s market right now, but there are still a few dozen suburbs around the country where there’s more housing stock available than in previous years. Today we’ll check out which 33 suburbs are still offering plenty of options for buyers.

One key factor that’s resulted in the current “seller’s market” across the majority of Australia is the low level of housing stock available for sale.

In the three months to May, CoreLogic estimates that around 164,000 dwelling transactions took place across Australia, while just 136,000 new properties were added to the market.

And as we all know, when demand outstrips supply, that naturally results in strong price increases.

So where do home buyers have more housing stock to choose from?

Rest assured some suburbs still have plenty of supply. CoreLogic has crunched the numbers and identified 33 suburbs across the country with listing volumes higher than the five-year average in May.

Some of them are famously trendy too, such as Fortitude Valley in Brisbane (pictured), Randwick in Sydney, and South Yarra in Melbourne.

Better yet, all 33 suburbs below have experienced less dwelling value growth over the past 12 months than their local region:

NSW: Macquarie Park (44 listings higher than 5-year May average), Lidcombe (33), Rockdale (30), Randwick (29), Westmead (25).

Victoria: Melbourne (140 listings higher than 5-year May average), South Yarra (73), Hawthorn (60), Carnegie (56), Port Melbourne (53).

Queensland: Fortitude Valley (15 listings higher than 5-year May average), Bowen Hills (10), Mulambin (8), South Townsville (7), Park Avenue (7).

WA: Nickol (10 listings higher than 5-year May average), Nedlands (9), Crawley (8), Baynton (6), Inglewood (5).

SA: Para Hills West (5 listings higher than 5-year May average), Bowden (4), Kilburn (4), Bedford Park (4), Everard Park (4).

ACT: Phillip (14 listings higher than 5-year May average), Latham (3), Dickson (3), Richardson (2), Higgins (2).

Tasmania: Hobart (4 listings higher than 5-year May average).

NT: The Gap (2 listings higher than 5-year May average), Wanguri (1).

Where would you like to buy?

Sure, understanding market trends and identifying outliers can help give you an advantage, but if you’ve got your heart set on somewhere else, they’re not the be-all and end-all.

Everyone has different preferences, purchasing power, circumstances and dreams, all of which will influence their “top suburb” in this hot market.

So if you’ve been researching a suburb and have an eye on your next property, get in touch today. We’d love to help you arrange finance for it.

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.

“Tide turning on interest rates”: CBA hikes fixed rates

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Australia’s biggest bank has hiked its three-year fixed rate for owner-occupiers in a further sign that “the tide is turning on interest rates”. So if you’ve been thinking about fixing your interest rate, it could be high time to do so.

Now, we’re not normally ones to write articles about the interest rate movements of particular products with particular lenders.

But we felt this one was significant given that the Commonwealth Bank (CBA) is the nation’s biggest home lender, with a market share of about 25%.

CBA has increased both its three- and four-year fixed rates for owner-occupiers paying principal and interest by 0.05%, as well as some interest-only loans by 0.10%.

“For anyone still on the fence about fixing their home loan rate, this is another example of the tide turning on interest rates,” Canstar research expert Mitch Watson says.

And we can’t say we weren’t warned.

In March, ANZ senior economist Felicity Emmett said fixed-mortgage rates had already reached their lowest point, or close to it, as lenders began lifting their four-year fixed rate products.

Furthermore, Canstar research shows 38% of lenders have increased at least one fixed rate over the past two months.

Why are fixed rates moving upwards if the RBA hasn’t lifted the cash rate?

The Reserve Bank of Australia (RBA) has repeatedly said the official cash rate isn’t likely to be increased until 2024 at the earliest.

But given that’s now within three years, the banks are beginning to adjust their three- to four-year fixed rates to head off those potential RBA rate hikes.

“The money market is already factoring in [RBA rate] rises,” explains AMP Capital chief economist Shane Oliver.

“That’s not having much of an impact on two-year rates yet. But as we go through the course of the year, the possibility of rate hikes will start to impact shorter rates as well.”

So what’s next?

Well, when CBA makes a move, it’s not uncommon for a number of other lenders to follow suit.

So if you’ve been umming and ahhing about fixing your rate, then it’s definitely worth getting in touch with us sooner rather than later.

We can run you through a number of different options, including fixing your interest rate for two, three, four or five years, or just fixing a part of your mortgage (but not all of it).

If you’d like to know more about this – or any of the other topics raised in this article – then get in touch today.

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.