This couple came to Lendology believing, as many first home buyers do, that a 20% deposit was the only way to buy without paying a significant LMI premium. They had $45,000 saved — enough for a 5% deposit on a $600,000 property but not nearly enough for 20%. Their plan was to keep saving for another two to three years.
The problem with that plan was the Adelaide property market. In the time it would take them to save the additional deposit, property prices in the suburbs they were targeting had historically increased by more than the amount they were saving. They were running to stand still — and did not know it.
Many first home buyers do not know about the First Home Guarantee, the First Home Owner Grant, or the stamp duty concessions available to them. These schemes can collectively reduce the cost of buying by $30,000 to $50,000 and bring forward the purchase date by years. Checking eligibility is the first thing Lendology does for every first home buyer client.
Lendology assessed their eligibility for every available government scheme and found they qualified for three: the First Home Guarantee (5% deposit, no LMI, government guarantees 15%), the SA First Home Owner Grant ($15,000 for a new build), and the stamp duty concession for first home buyers (saving them approximately $21,330 on their purchase).
The couple's original plan had been to buy an established property. Lendology explained that the First Home Owner Grant applied only to new builds — and modelled both scenarios side by side. A new build at a comparable price was eligible for the full $15,000 grant and the full stamp duty concession, which together more than offset the slight premium for buying new over established.
Lendology identified a lender participating in the First Home Guarantee scheme with a competitive rate, prepared and lodged the application, and managed the grant application simultaneously.
The couple purchased their first home — a new build in Adelaide's southern suburbs — within six months of coming to Lendology. They used a 5% deposit and paid no LMI. They received the $15,000 First Home Owner Grant at the first construction draw. And their stamp duty bill was zero.
If they had continued with their original plan — saving for a 20% deposit on an established property — they would have been waiting three more years and almost certainly paying a higher purchase price. The total benefit of acting sooner with the right advice was in excess of $80,000 when property price growth over the waiting period is included.
We genuinely did not know any of these schemes existed. Jason sat us down, went through everything we were entitled to, and showed us we could buy right now. We moved into our first home six months later.
The First Home Guarantee is a federal government scheme that allows eligible first home buyers to purchase with a 5% deposit without paying Lenders Mortgage Insurance. The government guarantees up to 15% of the property value. In South Australia the property price cap is $900,000.
The SA First Home Owner Grant is a one-off $15,000 payment for eligible buyers of new builds in South Australia. The property value must be $650,000 or less. It is paid at the first construction progress draw for construction loans.
Eligible first home buyers in SA may receive a full stamp duty concession on purchases up to $560,000 and a partial concession tapering to $700,000. The full concession can save up to $21,330.
Not always. In a rising market, the cost of waiting — in higher purchase prices — can significantly exceed the cost of LMI or the benefit of a larger deposit. Lendology models both scenarios for every first home buyer client so you can make an informed decision.
Book a free chat with Jason or Steve. We will assess your situation honestly and tell you exactly what is possible.