<< Go back to the blog's list

FHOG Changes - do you agree?

I'm sure by now you would have heard or read (page 4 of today's West) that as from the 1st July 2009 there will be a change to the First Home Owners Grant (FHOG) in that it will only be available to First Home Buyers who purchase a property of up to $750,000.00. In my view this change is long over due, had there been a cap on the price of the property being purchased from the beginning of this scheme it may have been possible for the Govt to increase the amount of the Grant before the you know what happened. Likewise if the Mortgage and Finance Association of Australia (also see today's West) are successful in convincing the Federal Govt to keep the Boost Grants in place for longer, a restriction on purchase price would certainly assist such a push.  First Home Buyers who may not qualify for the Grant after the 1st July 2009 need to be advised of this change and reminded that the time for taking advantage of the Boost Grant is fast running out.  Share your thoughts...............................Valerie


Scary figures and definitely food for thought, looks like the kids wont be moving out of home anytime soon and will be eyeing off their parent's retirement fund as a deposit. Thanks Brook. Valeriex Valerie
12/03/2009 11:14:00 AM

Just crunching some quick numbers for you and based on the following assumptions:

Joint Income of $140k pa equates to $70k pa ea which is $4496.00npm ea.

Married with no kids.

1x credit card with $10k limit and no other debts.

Max b/cap $1,103,846 (this would put them on the bare bones of their butt). Monthly repayments are $6086.16 on this level of debt.

Deposit on a purchase price of $600k would be $120k (assuming we are not paying mortgage insurance). End loan amount would be $480k (assuming they had sufficient to cover stamping and settlement costs). Repayments on this $480k would be $2638.70 per month.

So based on the above they could afford it. Now this is right now at this very moment in time...not in 2 years once they have a child with another on the way etc etc. Responsible lending would dictate that some forward planning with your clients is looked at to ensure that whilst they can afford their lovely home now that they can afford to keep it when things get a little financially tighter.

Hope this helps.

Brook Durling
6/03/2009 4:40:00 PM
Great questions John, hopefully one of our banker or broker contacts will be able to answer, I'll email a couple and ask them to respond Valerie
6/03/2009 4:17:00 PM

Leave your comments...

Your Name : *
Your Email :
(will not be shown) *
Your Comment :
Code : *
Type the code into the text box above.