Stretching your deposit/savings
When you’re saving for a first home, be sure to tap into the wide variety of support available to grow your deposit.
It’s a no-brainer that your first home is likely one of the biggest purchases you’ll ever make. Understandably you’ll want to get the most out of the money you’ve saved up, and the more you can put down for a deposit, the better a position you’ll be in as a first home buyer.
Why a bigger deposit is better for first home buyers
Here are some ways that saving more for a deposit will benefit you in the big picture when you buy your first home:
Negotiate a better interest rate: The larger your purchase deposit, the less risk you represent to lenders. This puts you in a better position to negotiate a lower interest rate.
Avoid paying lender’s mortgage insurance: If you can put down a deposit of 20% or more, you can often avoid paying what’s known as lender’s mortgage insurance’ (LMI). LMI protects the lender, not you, if you cannot repay your loan – so it’s a cost worth avoiding if possible.
More loans to choose from: A bigger deposit can also give you a wider choice of loans, and that makes it easier to get a good deal on the right loan, letting you save even more in the longer term.
The good news is, there is a generous selection of financial support options available to first home to boost your deposit and savings. Let’s take a look at what’s up for grabs.
Using superannuation for a first home deposit
You probably know that super is money set aside for your retirement. But in 2017 the federal government introduced the First Home Super Saver Scheme (FHSS), which allows first home buyers to use superannuation for a first home deposit.
FHSS – First Home Super Saver Scheme
Under the FHSS, first home buyers can make voluntary contributions to super using before-tax money to save for a deposit. Up to $15,000 each year – and $30,000 in
Then, when you’re ready to buy, you can withdraw these contributions plus the returns the government estimates you have earned, for a deposit on your home.
Can I use my super?
Yes! One of the big pluses of using super to buy your first home through the FHSS is that your contributions are taxed at a lower rate. So more of your money can go towards growing a deposit.
In fact, the government estimates that the First Home Super Scheme could boost the savings you can put towards a deposit by at least 30%.
First Home Buyers Assistance Scheme
The First Home Buyers Assistance scheme is available in New South Wales. It provides savings on stamp duty for first home buyers. No duty is payable on new and established homes valued up to $650,000 or vacant land worth up to $350,000. Savings on stamp duty can even be available if your home is worth up to $800,000 or you buy land costing up to $450,000.
NSW Government First Home Buyers Assistance scheme
As we’ve seen, the NSW Government First Home Buyers Assistance scheme provides handy savings if you’re buying in NSW. But similar concessions are available in other states. In Victoria
For a full breakdown of the grants available in your state or territory, read here.
FHB Assistance Scheme benefits
The FHB Assistance Scheme benefits provide valuable savings on duty. As
FHB Assistance Scheme incentives
The FHB Assistance Scheme extends savings the stamp duty for first home buyers in NSW to both new and established homes. So you don’t have to buy or build a new place to benefit from the scheme.
With similar support available in other states and territories, take a look at Aussie’s Stamp Duty Calculator to see the first home buyer incentives you could be entitled to.
Home buying assistance
Stretching your first home deposit and savings means taking advantage of all the different types of home buying assistance available in your patch. Your Aussie Broker can explain exactly what’s available in your area based on your circumstances.
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- Chapter One : Getting started
- Chapter Two : Your Dream Home
- Chapter Three : Money Matters
- Chapter Four : Ways to Purchase
- Chapter Five : Understanding Interest Rates
- Chapter Six : Understanding Home Loans
- Chapter Seven : Lending Sources
- Chapter Eight : Getting Your loan
- Chapter Nine : Choosing a Home
- Chapter Ten : Steps to Settlement