South Australians will soon be able to buy their first home with a low down payment on HomeStart loans
Owning a home could soon become a reality for more South Australians with a state government-backed lender lowering their minimum deposit requirements.
- The HomeStart graduate loan has reduced its minimum deposit from 3% to 2
- The program is available to South Australians with a Certificate III or higher qualification
- The lender is a South Australian government organization that provides home loans
Eligible graduates will be able to apply for a home loan from HomeStart Finance with as little as 2% down payment.
Successful applicants won’t need to pay for lender’s mortgage insurance — required by most lenders if homebuyers don’t have a 20% deposit — which could save thousands of dollars in upfront costs.
House prices in July rose for Adelaide, Perth and Darwin, while other major Australian cities fell due to soaring interest rates.
Treasurer Stephen Mullighan said the loan could erase months from the savings plans of people trying to buy their first home.
“Rather than South Australians having to spend years and years trying to save 20% of their deposit to get a loan from one of the big four banks, that time is now reduced to perhaps just a few months. “, did he declare.
Mr Mullighan said the reduced deposits for the HomeStart scheme would allow people with low to middle incomes to participate in the auction.
He said the government expects Adelaide’s housing market to stabilize as interest rates rise.
“While some of the heat is going to come out of the market, for the first time we are going to see South Australians properly armed so they can be competitive in the market,” he said.
It estimates that more than 250,000 South Australians with a Certificate III or higher qualification will be eligible for the scheme.
The minimum deposit required for this loan is 3%.
For a $400,000 home, loan seekers will only have to pay $8,000 in deposit and for a price of $850,000, buyers will pay $17,000 instead of $25,500 in deposit.
Electrician Robert Thiel and hotel worker Beth Mayfield, who currently rent from Lockleys, say the change will help the couple enter the housing market sooner.
“Any amount you can save as a potential homeowner is life changing,” Ms Mayfield said.
“I never thought it would be possible for me, to be honest, so it’s really exciting that it’s something really achievable for us.”
Ms Mayfield said her rent had risen in recent months, encouraging her to consider becoming a landlord.
The HomeStart graduate loan will be offered from Tuesday.