The long-awaited housing affordability package commenced on 1 July 2017.

1. NSW has now scrapped stamp duty for first home buyers on existing and new homes up to $650,000.

2. There will also be stamp duty discounts for homes up to $800,000.

3. There also is a $10,000 grant for new homes up to $600,000.

The government also abolished the stamp duty charged on lenders' mortgage insurance, which will save around $2,900 on an $800,000 property.

Andrew Cusack, Director of Money Warehouse, says that he finds that many don’t understand what they need in order to purchase a property – in terms of deposit and income.

Andrew points out that in terms of deposits/funds needed:

- If stamp duty does not apply the borrowers MAY get away with as little as 5 – 7% deposit to cover deposit and costs.

- If stamp duty does apply borrowers MAY get away with as little as 10% deposit – to cover deposit, stamp and costs.

- If borrowers have enough for a 20% deposit they will get better rates and won’t have to pay Lenders Mortgage Insurance, but will also need to cover stamp duty if applicable

- If parents are able / willing to pledge equity in their home borrowers may get away with ZERO deposit as a guarantee is taken over the equity in their parents’ property

In terms of capacity:

- Rough rule of thumb is that people can borrow around 5 to 6 times of their GROSS taxable income in total borrowings but, they still need to have the equity above.

- This is of course subject to living expense that are reasonable and no other outrageous spending habits or credit card limits.

 Liaising with a professional mortgage broker can help to clarify your position and understand what your mortgage options are. WLM can help arrange for an introduction if required.