Navigating the path to your first home on the Gold Coast? This guide explains two key topics for first home buyers: the new Help to Buy shared equity scheme and how your HECS/HELP student debt can impact your borrowing power. Understand your options and learn how to create a winning strategy for your mortgage application.
Getting into the Gold Coast property market is an exciting goal, but for many first home buyers, the landscape can seem complex. Two of the most talked-about topics are the government's new 'Help to Buy' scheme and that old friend who loves to hang around—your HECS/HELP student debt.
Understanding how both of these factors impact your journey is key. Here's what you need to know.
Part 1: The 'Help to Buy' Shared Equity Scheme
This Federal Government initiative is designed to help more Australians get into their own home with a smaller deposit and a smaller home loan.
- How does it work?It’s a shared equity scheme. The government contributes a percentage of the property's purchase price in exchange for an equivalent ownership stake. This can be up to 40% for a new build or 30% for an existing home.
- What's the big benefit?With the government contributing a large portion, you need a much smaller home loan. This means you can get into the market with a deposit as low as 2% and you won't need to pay Lenders Mortgage Insurance (LMI).
- Who is it for on the Gold Coast?The scheme has specific income and property price caps. For the Gold Coast, the property price cap is set at $950,000. Our team can run you through the full eligibility criteria to see if you qualify.
Part 2: How Your HECS/HELP Debt Affects Your Loan Application
While government schemes can boost your buying power, lenders will still look closely at your financial commitments. One of the most common is your student debt.
- How do lenders see HECS/HELP?It's important to know that HECS/HELP debt is not like a credit card or personal loan—it doesn't typically affect your credit score. However, your compulsory repayments are factored into your expenses.
- How does it impact your borrowing power?Lenders look at your total income and subtract your expenses, including your HECS/HELP repayment amount, to determine how much you can afford to repay on a mortgage. The higher your income, the higher your HECS repayment, which can reduce your overall borrowing capacity.
Bringing It All Together: A Cohesive Strategy
Navigating the path to homeownership means looking at your entire financial picture. Is a shared equity scheme right for you? How much is your HECS debt really impacting your ability to borrow?
This is where expert advice is crucial. As your mortgage broker, we can:
- Clearly explain the long-term pros and cons of the Help to Buy scheme.
- Calculate the precise impact of your HECS debt on your borrowing power across different lenders.
- Create a clear strategy that takes all these factors into account for a successful mortgage application.
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Let’s chat today and find the right solution for you. Whether you’re buying your first home, expanding your business, or upgrading your vehicle, Maxine and the Max Rich Brokerage team provide expert, obligation-free guidance across the Gold Coast, Logan, Brisbane, and the Scenic Rim, tailored to your goals.
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