First-home buyers wanting to buy next year using the federal government’s new home loan deposit scheme will be limited to properties sold for less than $475,000 in the Brisbane Region.
First home buyers in Queensland will be able to purchase properties in Brisbane up to $475,000 in value.
The scheme to be known as the First Home Loan Deposit Scheme will apply to owner-occupied loans on a principal and interest basis.
Property price caps under the scheme set appropriate price thresholds in capital cities, large regional centres with a population over 250,000 and regional areas.
Under the draft rules, the scheme will allow low-and middle-income earners to buy property with a deposit of as little as 5 per cent.
Treasurer John Frydenberg and Housing Minister Michael Sukkar released the government’s draft Investment Mandate for the First Home Loan Deposit Scheme.
It revealed the “appropriate price thresholds” for properties depending on city and region around Australia.
The threshold is well below the median house price for capital cities.
The number of applicants will be capped at 10,000 each year.
The initiative begins on January 1, 2020.
It removes the cost of lenders mortgage insurance for FHBs with an annual income of up to $125,000 or couples with a combined $200,000 per year who haven’t saved the standard 20 per cent deposit typically required by banks.