Almost half of Australians are unaware of the federal government’s $1.2 billion First Home Saver Accounts (FHSA) scheme, a national survey has found – are you one of them?
According to Loan Market Group, 46 per cent of respondents have never heard of the scheme which was launched two years ago as a means of helping young Australians save for a home loan deposit.
Loan Market Chief Operating Officer Dean Rushton says less than 20,000 accounts have been opened nationwide since the scheme started in October 2008.
“The scheme when it was launched was aiming to assist more than 700,000 people within the first four years but it has attracted nowhere near the amount of interest anticipated,” he says.
Under the FHSA, the government contributes 17 per cent on the first $5,000 of individual contributions made each year. That equates to $850 per year.
This sounds great, but Loan Market’s survey highlights that first home buyers find the accounts inflexible and difficult to set up.
According to the brokerage’s survey results, 29 per cent of respondents said the requirement to keep their savings in the account for four years before they could use them to buy a home was too long. Another 18 per cent of the 400 respondents said the scheme lacked flexibility and seven per cent said there was too much paperwork involved.
So is a First Home Saver Account a worthwhile option for first home buyers to consider?
The answer will of course depend on a number of factors, including your capacity to save, with the accounts requiring a minimum of $1,000 to be deposited each year in order to secure access to the funds at the end of a four year period.
Just when you are planning on buying a home will also play a large role in determining how suitable the scheme is for you – account holders are required to keep savings in the FHSA for four financial years before they can put the funds towards a home purchase.
To make up your own mind, visit http://www.homesaver.treasury.gov.au for more details.