First Home Buyer's guide to 5% deposit schemes

As an NDIA employee, you're contributing to vital work that supports Australians with disabilities. While you're focused on making a difference in people's lives, you might be wondering how to achieve your own homeownership goals without waiting years to save a traditional 20% deposit.

The good news is that first time home buyer schemes, particularly the 5% deposit options, can help you step into the property market sooner than you might think.

Understanding the Home Guarantee Scheme

The Home Guarantee Scheme is a government initiative designed to help eligible Australians buy their first home with a smaller deposit. Instead of saving the full 20% deposit typically required to avoid lenders mortgage insurance (LMI), you can potentially purchase with just 5% down.

Here's how it works:

• The government acts as guarantor for the portion of your loan above 80% loan to value ratio (LVR)
• You avoid paying LMI, which can save thousands of dollars
• You can access home loan options from banks and lenders across Australia
• Your borrowing capacity may be higher than traditional loan products

Benefits for NDIA Employees

Working for the NDIA comes with certain advantages when applying for a home loan. Many lenders recognise public service employment as stable and reliable, which can work in your favour during the application process.

Key benefits include:

• Potential access to interest rate discounts through employer packages
• Streamlined application process with some lenders
• Recognition of job security in your financial situation assessment
• Access to banks and lenders nationwide through specialist brokers

First Home Owner Grants and Stamp Duty Concessions

Beyond the 5% deposit scheme, first home owner grants (FHOG) and stamp duty concessions can further reduce your upfront costs. These vary by state and territory, but can provide substantial savings when buying your first home.

For example, some states offer:

• Cash grants of up to $10,000 for eligible first-time buyers
• Stamp duty exemptions or reductions on properties under certain price thresholds
• Additional concessions for new builds versus established properties

Choosing Between Variable and Fixed Interest Rates

When you get pre-approved for your first home loan, you'll need to decide between variable interest rate and fixed interest rate options. Each has advantages depending on your circumstances:

Variable rates fluctuate with market conditions and often come with features like offset accounts, which can help reduce interest over time.

Fixed rates provide certainty with your repayments for a set period, making budgeting more predictable.

Many borrowers choose a split loan, combining both options to balance flexibility with stability.

The Application Process

Applying for a home loan through the 5% deposit scheme involves several steps:

1. Assessment of borrowing capacity - This includes reviewing your income, expenses, and overall financial situation
2. Document preparation - You'll need recent bank statements, payslips, and employment verification
3. Pre-approval - This gives you confidence when making offers on properties
4. Property selection - Ensure the property meets scheme requirements
5. Final approval - Complete the loan application with your chosen property

Investment Loan Options for the Future

While your focus is on buying your first home, it's worth understanding that your first investment property journey may be possible sooner with the equity you build. Investment loan options and investment loan applications have different criteria, but establishing yourself in the property market now sets the foundation for future wealth building.

Making Your Move

The property market presents opportunities for those ready to act. With stable employment at the NDIA and access to first time home buyer programs, you're well-positioned to take advantage of these schemes.

Working with mortgage brokers who understand both the public service sector and these government initiatives can make the difference between waiting years to buy and moving into your own home within months.

Your contribution to supporting Australians through the NDIS deserves recognition, and homeownership shouldn't be out of reach because of deposit requirements. The 5% deposit scheme, combined with your employment stability, creates a pathway to property ownership that's worth exploring.

Call one of our team or book an appointment at a time that works for you to discuss how these first time home buyer schemes could work for your situation.