October saw the third interest rate cut since June with the Reserve Bank cutting official rates to a new record low of 0.75%. Interest rates in Australia have halved since June.
The Federal Government also announced eligibility details for its First Home Loan Deposit Scheme. Under the Scheme, up to 10,000 eligible first home buyers each year will be able to access a government-guaranteed loan from 1 January 2020.
The loan amount will be the difference between their own deposit and the 20% deposit required by lenders to avoid lenders’ mortgage insurance.
The cost of this insurance varies depending on the deposit and the size of the loan, but it can cost borrowers $10,000 or more on a property worth $500,000 with only a $50,000 (10%) deposit. To be eligible for the Scheme, first home buyers will have to raise at least 5% deposit themselves and be buying a property in an Australian capital city that is underneath the following threshold values: Sydney $700,000, Melbourne $600,000, Canberra $500,000, Brisbane $475,000, Perth $400,000, Adelaide $400,000, Hobart $400,000 and Darwin $375,000.
Download and read the full Market Essentials – November 2019 Report.