The National Housing Finance and Investment Corporation (NHFIC) released new data and trends on the First Home Loan Deposit Scheme (FHLDS) and the New Home Guarantee (NHG).

These schemes enable first home buyers to shirk lenders mortgage insurance despite paying only a 5% deposit.

The Government guarantees the remaining 15% usually required for a deposit, and there are upwards of 30 lenders participating in the schemes.

The findings revealed that since 1 January 2020, there have been 22,879 homes purchased or built supported by the FHLDS and the NHG.

This represents almost 33,000 new home owners; the top states that were supported were NSW (11,000 recipients) and Queensland (9,000 recipients).

The strongest proportional demand for the guarantees came from Queenslanders, making up 26% of FHLDS guarantees issued and 27% of NHGs.

By postcode, demand for the FHLDS was strongest in Melbourne's north-west with 109 guarantees issued.

For the NHG, Sydney's north-west recorded the largest volume of recipients at 158.

The geographical coverage of schemes was broad in line with the general population distribution, with more people accessing the NHG near capital cities (76%) compared to the FHLDS (63%).

Nathan Dal Bon, NHFIC CEO, said it's great to see Australians from all walks of life are being helped by these schemes. 

"The interstate migration to the regions is particularly noteworthy and reflects a trend we have seen since COVID-19," Mr Dal Bon said.

"This is particularly pronounced in Queensland which has been the greatest benefactor of interstate migration."

Buyers were willing to move away from their current residences to own their first home, particularly under the NHG, throughout 2020-21.

NHFIC reported that buyers moved an average of 8.4km under the FHLDS, and 13km to use the NHG. 

At one stage last year, it was estimated the FHLDS alone was supporting up to one in eight first home buyers.

FHLDS helped reduce debt despite dearer houses

The amount of debt new home buyers have accumulated relative to their income has declined 'modestly' under the FHLDS despite rising house prices.

The average debt-to-income ratio of FHLDS recipients is down from 4.92 in 2019-20 to 4.79 in 2020-21 according to NHFIC. 

Support for both schemes was concentrated in the younger first home buyer demographic, as 58% of recipients were younger than 30. 

Additionally, more than 3,700 key workers have been supported by the FHLDS and NHG throughout 2020-21, making up nearly 6,000 since early 2020. Of these key workers, 70% were nurses or teachers.

"With growing housing affordability pressures, it is also very pleasing to see the schemes have supported almost 6,000 key workers purchase their first home," Mr Dal Bon said.

NHFIC's analysis showed that buyers could own their homes sooner under both schemes.

On average, FHLDS recipients could own their homes four years earlier, while NHG recipients could own their homes four and a half years earlier. 

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Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of . View disclaimer.

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