Latest news with #firsttimebuyers
News.com.au
4 hours ago
- Business
- News.com.au
Bombshell deal to give select buyers the upper hand
Are first-time buyers are finally getting the attention they deserve? Queensland's state government announced its Boost to Buy shared equity scheme – a similar but separate initiative to the federal government's Help to Buy scheme that's due to launch later this year. This is great news for first-home buyers who don't have access to the 'bank of mum and dad' – but it's not without risks. It's a cautious welcome from me. I've done some digging with the comparison experts at Compare the Market to break down the key differences in the two schemes. First, what's a shared equity scheme? Inside billionaire Annie Cannon-Brookes' revamp of trashed island A share in value growth Governments are finally coming to the table with one of the biggest helping hands for first-home buyers I have seen. The government acts essentially as a partner to contribute to the deposit purchase of a home in exchange for a share in the equity. So, the affordability barrier is lowered, and eligible participants buy out the government's stake over time or when the property is sold. Both the Queensland Government's and the federal government's work on the same premise but differ in terms of eligibility criteria and limits on support. Strangely, it appears Queenslanders may have a choice between the two – but it's unclear at this stage. HERE'S A COMPARISON: Help to Buy (Federal) Eligibility: Single income: Up to $100,000/year; Couple income: Up to $160,000/year. Minimum Deposit: 2pc of purchase price Maximum Property Value: – QLD: $1 million (Brisbane and regional centres) or $700,000 (other) – NSW: $1.3 million (Sydney and regional centres) or $800,000 (other) – VIC: $950,000 (Melbourne and regional) or $650,000 (other) – ACT: $1 million – TAS: $700,000 (Hobart) or $550,000 (other) – SA: $900,000 (Adelaide) or $500,000 (other) – WA: $850,000 (Perth) and $600,000 (other) Shared Equity: New homes: 40pc; Existing homes: 30pc. Allocation Cap: – National: 10,000 per year for four years in total – QLD: Around 2,000 per year for four years – NSW: Around 3,300 per year for four years – Other states: TBA Boost to Buy (QLD only) Eligibility: Single income: Up to $150,000/year; Couple income: Up to $225,000/year. Minimum Deposit: 2pc of purchase price Maximum Property Value' – $1 million (all regions in Queensland) Shared Equity: New homes: 30pc; Existing homes: 25pc. Allocation Cap: – 1,000 in the 2025-26 Queensland Budget We have already seen Victorians benefit from the Homebuyer Fund, a similar scheme where the state government contributed up to 25 per cent for an equivalent share in the property, but this has recently been discontinued. Govt pays $3.3m for unliveable derelict house So, are shared equity schemes worth it? Anything to give a leg up for Australians to own a home is fantastic. It provides an opportunity for Australians to afford a home or one that was otherwise less achievable than before, with no payable Lenders' Mortgage Insurance (LMI). It's especially helpful for those whose parents can't chip in for a deposit or act as guarantors. Eligible would-be homeowners may also be able to stack Help to Buy or Boost to Buy schemes with other first-home buyer government incentives as a bonus – but be sure to check first. However, it's worth remembering that there are risks. Here are my key tips if you're considering a shared equity scheme. 1. Rates may be higher. Only select lenders will participate in these first-home buyer initiatives, reducing your choice and likelihood of being on a competitive rate. Mortgage brokers like Compare the Market can help you look for lenders offering these schemes. 2. Know your limits. If you can only save for a 2pc deposit, should you really be buying a home? It may seem like an 'easy' win, but don't overreach yourself and understand what you can afford realistically now and down the line, accounting for potential interest rate increases and decreases and changes to the value of the equity share. I think a 2.5 per cent deposit for a single person is okay, but for couples, 5pc means pitching in $17,500 per person for a $700,000 purchase. It's not easy to save, but that effort means you're in a better position to buy. 3. Understand the risk. Governments aren't just giving out money with no scrutiny. For Help to Buy, if your income exceeds the annual threshold for two consecutive years, you may be required to repay the government's contribution by refinancing. Essentially, they can pull out of the deal if you end up having a higher-paid job. Remember, a lot can happen in 30 years. 4. Increased demand. These initiatives will again put increased pressure on the housing market that's already at boiling point – and will likely drive-up prices even more. Allocation caps may help but they're not a panacea. 5. Supply continues to be a barrier. The federal government is still incentivising Australians to buy new, up to 40pc deposit for newly built homes. However, many first-home buyers cannot afford a new build, because of high construction costs which will likely continue for the foreseeable future. Until this is remedied, first home buyers are priced out in most areas. Other than increased demand, there is also a side-effect on the property market here. I'm never comfortable with governments using a specific property value as a criteria benchmark for these types of incentives. Why? Because it messes with home values. For example, a set $1m maximum means a home with around that now will end up selling too cheap in order to meet the shared equity incentive threshold. Conversely, any units around the $900,000 value may get artificially high selling figures. The solution is to base thresholds on incomes only – which is simpler and makes more sense to dictate budgets. Some details remain patchy, but overall, it's great to see more being done to get young Australians into the property market sooner. Let's hope it helps. *Andrew Winter is a property expert at Compare the Market.
Forbes
8 hours ago
- Business
- Forbes
Rising Insurance Costs Make Buying A First Home Even Harder
Skyrocketing home insurance costs are extra challenging for first-time buyers. It used to be said that owning a home protected you from unpredictable costs like rent hikes. It added stability to your life and finances. Is this still true? Have skyrocketing home insurance costs eliminated the predictability and stability of homeownership? Have they contributed to the crisis of young couples unable to buy homes and start their families? These costs have definitely been a contributing factor, according to industry observers. Insurance Adding to First Time Buyer Challenges 'First-time home buyers have dropped to the lowest level recorded in more than four decades,' shares the National Association of Realtors' economist Jessica Lautz. Insurance is one pain point among others, including higher mortgage rates, HOA fees, energy costs and home prices themselves, she notes. Inflation is impacting all aspects of homeownership. Lautz points to a 2024 NAR homebuying study that details home insurance costs. 'Over the past decade, while consumer prices have risen by approximately 30%, homeowners' insurance costs have surged by more than 50%,' it notes. The high cost of housing and increased prices for everything related to homeownership, including insurance, is causing couples to delay starting families and impacts their physical as well as fiscal, health. 'Bringing housing costs to an affordable level can make all the difference in the life — and future — of a family,' according to one of many studies on the topic, this one by Habitat for Humanity. 'Homeowners insurance is yet one more hurdle to affordability,' observes Down Payment Resource CEO Rob Chrane. 'Like interest rates, it affects how much you can borrow, reducing the price range of homes you can afford,' he adds. The uncertainty around the cost of insurance your prospective home can be more damaging than the sticker shock of home prices. 'An unexpected $1,000 to $2,000 increase for homeowners insurance can suddenly upend your budget,' he shares, noting, 'In specific markets, we've encountered situations where the monthly escrow payment for insurance alone surpasses the loan's principal and interest payment.' High interest rates are still the bigger psychological hurdle, Chrane notes, shaping what buyers think they can afford. 'But insurance costs are quickly catching up. Again, uncertainty plays a role. Interest rates are visible up front, while insurance costs come up later in the process, surprising some buyers and throwing them off track at the worst moment.' Scope of the Problem 'According to LendingTree's 2025 State of Home Insurance Report: 'Home insurance rates have spiked 40.4% in the past six years, with the last two years seeing double-digit increases.' Rates were fairly stable from 2019 to 2021, then surged afterward. 'This is a relatively new trend,' notes licensed insurance expert and LendingTree contributor Rob Bhatt. 'Up until a few years ago, homeowners insurance was usually an afterthought in the homebuying process. Many homebuyers now need to think about home insurance earlier on in the process than before.' Location, Location, Location It's reasonable to expect that states like California, Florida and Texas, with their headline-grabbing disasters, would be the front runners for insurance hikes. However, as Chrane observes, other forces contribute to rising premiums, including regulatory challenges and insurer exits. Disaster-prone states have also set up their own insurer-of-last-resort programs for regions where homeowners can't find policies. Bhatt points to California's as an example. 'Even if your insurance company doesn't raise your normal home insurance rate, you may receive an extra charge to help cover the FAIR Plan's expenses.' He also notes that California's insurance commissioner has given conditional approval for State Farm's temporary rate hikes to become permanent. 'I imagine other companies have filed, or will file, for rate increases to keep up with the rising costs of insuring homes in California,' he predicts. The latest natural disaster to hit homeowners was the Texas hill country flash floods from earlier this month. Bhatt doesn't expect them to hike rates for one simple reason: 'Homeowners insurance doesn't cover floods.' At the same time, the insurance expert notes that insurers tend to avoid homes in elevated risk areas. 'Considering the extent of the damage, I suspect that some insurance companies may be less willing to insure homes in these affected areas than they have in the past. Some may continue insuring homes in the affected areas but charge higher rates.' He also notes that the flooding may rewrite flood zone maps, which can impact both the costs and availability of coverage. 2026 Prediction Bhatt sees signs of stabilization. 'We may be entering a normal pattern where rates only increase slightly from year to year or even come down. This, in turn, may provide some relief to homeowners and home buyers.' However, he cautions, life can be unpredictable. Buyer Tips The LendingTree pro suggests shopping around for a lower rate and considering a higher deductible to save money. He also notes that 'It's good to avoid filing claims for relatively minor repairs. Insurance companies usually raise your rates after a claim of any size. If you have two or more claims within a short amount of time, your insurance company may drop you.' It's better to payout of your pocket for damage of a couple thousand or less, he cautions. 'In the long run, you're usually better off saving insurance for large expenses you wouldn't otherwise be able to afford.' You can also save on your premiums by making your home more disaster resistant, he notes. I've written about the Fortified hurricane and Wildfire Prepared Home programs. Even if you don't go for a full certification, you can let your insurer know about specific changes you've implemented to potentially save on your insurance coverage. Chrane urges buyers to research down payment assistance programs like his to lessen their financial burden. 'Once their budget is set,' he suggests, 'they should talk with home insurance agents and compare quotes because premiums can differ by hundreds or even thousands of dollars annually for the same coverage.' Lautz agrees that prospective buyers should be researching down payment assistance programs and considering overlooked neighborhoods.
Yahoo
a day ago
- Business
- Yahoo
Mortgage and refinance interest rates today for July 21, 2025: Rates have increased since last July
Current mortgage interest rates have changed little. According to Zillow, the average 30-year fixed mortgage rate is sitting at 6.72% while the average 15-year fixed mortgage rate is 5.97%. Rates have increased since this time last year. In July 2024, the average 30-year fixed mortgage rate was 6.58% while the average 15-year fixed mortgage rate was 5.86%. Many people expected rates to fall this year, but that hasn't been the case. This is a good example of why home buyers should buy a house when the timing works for them, rather than following interest rate trends. Read next: Best mortgage lenders for first-time buyers Current mortgage rates Here are the current mortgage rates, according to the latest Zillow data: 30-year fixed: 6.72% 20-year fixed: 6.52% 15-year fixed: 5.97% 5/1 ARM: 7.42% 7/1 ARM: 7.4% 30-year VA: 6.33% 15-year VA: 5.69% 5/1 VA: 6.49% Remember, these are the national averages and rounded to the nearest hundredth. Current mortgage refinance rates These are today's mortgage refinance rates, according to the latest Zillow data: 30-year fixed: 6.70% 20-year fixed: 6.60% 15-year fixed: 5.67% 5/1 ARM: 7.59% 7/1 ARM: 7.46% 30-year VA: 6.32% 15-year VA: 6.15% 5/1 VA: 6.43% Again, the numbers provided are national averages rounded to the nearest hundredth. Although it's not always the case, mortgage refinance rates tend to be a little higher than purchase rates. Read more: The best mortgage refinance lenders right now Refinance interest rates Up Next Up Next Mortgage payment calculator You can use the free Yahoo Finance mortgage calculator to play around with how different terms and rates will affect your monthly payment. Our calculator considers factors like property taxes and homeowners insurance when estimating your monthly mortgage payment. This gives you a better idea of your total monthly payment than if you just looked at mortgage principal and interest. But if you want a quick, simple way to see how today's rates would impact your monthly mortgage payment, try out the calculator below: 30-year mortgage rates today Today's average 30-year mortgage rate is 6.72%. A 30-year term is the most popular type of mortgage because by spreading out your payments over 360 months, your monthly payment is relatively low. If you had a $300,000 mortgage with a 30-year term and a 6.72% rate, your monthly payment toward the principal and interest would be about $1,940, and you'd pay $398,334 in interest over the life of your loan — on top of that original $300,000. 15-year mortgage rates today The average 15-year mortgage rate is 5.97% today. Several factors must be considered when deciding between a 15-year and 30-year mortgage. A 15-year mortgage comes with a lower interest rate than a 30-year term. This is great in the long run because you'll pay off your loan 15 years sooner, and that's 15 fewer years for interest to compound. However, your monthly payments will be higher because you're squeezing the same debt payoff into half the time. If you get that same $300,000 mortgage but with a 15-year term and a 6.72% rate, your monthly payment would jump up to $2,527 — but you'd only pay $154,808 in interest over the years. Dig deeper: How much house can I afford? Use our home affordability calculator. Adjustable mortgage rates With an adjustable-rate mortgage, your rate is locked in for a set period of time and then increases or decreases periodically. For example, with a 5/1 ARM, your rate stays the same for the first five years, then changes every year. Adjustable rates usually start lower than fixed rates, but you run the risk that your rate goes up once the introductory rate-lock period is over. But an ARM could be a good fit if you plan to sell the home before your rate-lock period ends — that way, you pay a lower rate without worrying about it rising later. Lately, ARM rates have occasionally been similar to or higher than fixed rates. Before dedicating yourself to a fixed or adjustable mortgage rate, be sure to shop around for the best lenders and rates. Some will offer more competitive adjustable rates than others. How to get a low mortgage rate Mortgage lenders typically give the lowest mortgage rates to people with higher down payments, excellent credit scores, and low debt-to-income ratios. So if you want a lower rate, try saving more, improving your credit score, or paying down some debt before you start shopping for homes. You can also buy down your interest rate permanently by paying for discount points at closing. A temporary interest rate buydown (as mentioned early in the article) is also an option — for example, maybe you get a 6.5% rate with a 2-1 buydown. Your rate would start at 4.5% for year one, increase to 5.5% for year two, then settle in at 6.5% for the remainder of your term. Just consider whether these buydowns are worth the extra money at closing. Ask yourself if you'll stay in the home long enough that the amount you save with a lower rate offsets the cost of buying down your rate before making your decision. Mortgage rates today: FAQs What are interest rates today? Here are interest rates for some of the most popular mortgage terms: According to Zillow data, the national average 30-year fixed rate is 6.72%, the 15-year fixed rate is 5.97%, and the 5/1 ARM rate is 7.42%. What is a normal mortgage rate right now? A normal mortgage rate on a 30-year fixed loan is 6.72%. However, keep in mind that's the national average based on Zillow data. The average might be higher or lower depending on where you live in the U.S. Will mortgage rates drop down? Mortgage rates probably won't drop significantly in 2025 — especially over the next several weeks while economists keep an eye on inflation, tariffs, and the Federal Reserve.
Gulf Business
a day ago
- Business
- Gulf Business
Dubai property market breaks records: What's driving the Dhs431bn surge?
Image credit: WAM/ Website Dubai's real estate sector delivered an exceptional performance in the first half of 2025, reinforcing the emirate's position as a global leader in property investment and development. According to data from the Dubai Land Department (DLD), the number of real estate transactions surged to 125,538 in H1 2025, compared to 99,947 during the same period in 2024, marking a 26 per cent increase. The total value of transactions rose 25 per cent, reaching approximately Dhs431bn, up from Dhs345bn a year earlier, Read- The overall volume of real estate procedures—including sales, leases, and other transaction types, exceeded 1.3 million in the first six months of the year. The strong numbers reflect growing investor confidence and continued demand across Dubai's diverse real estate segments. Surge in investment and new buyers The investment landscape remained robust, with 94,717 investors completing 118,132 deals worth around Dhs326bn in H1 2025. That represents a 26 per cent increase in investor participation and a 39 per cent rise in investment value, compared to Dhs234bn in the same period last year. New investors contributed significantly to this growth, with 59,075 first-time participants entering the market. Their investments totalled Dhs157bn, marking a 22 per cent rise in the number of new investors and a 40 per cent jump in capital inflow. UAE residents accounted for 45 per cent of these new investors, reflecting the success of government strategies aimed at converting tenants into homeowners and encouraging long-term stability in the market. Women played a growing role in driving activity, investing Dhs73.2bn across 34,792 transactions made by 30,487 female investors. This increase highlights the rising influence of women in shaping the sector and contributing to economic diversity. By nationality, GCC investors accounted for Dhs22.56bn, Arab investors Dhs28.4bn, and foreign investors Dhs228.35bn. These figures reinforce Dubai's global standing and its continued appeal among international buyers, driven by an advanced regulatory environment, strong infrastructure, and growth-focused initiatives. Top areas by transactions and value Several districts saw standout performance in terms of transaction volume. Al Barsha South Fourth led the market with 10,469 transactions, followed by Al Yalayis 1 (7,595) and Wadi Al Safa 5 (7,178). Other active locations included Business Bay (6,601), Dubai Marina (6,428), Airport City (5,569), Jebel Ali First (4,275), Al Thanyah Fifth (3,956), Burj Khalifa (3,670), and Meaisem First (3,643). The widespread activity highlights the depth and diversity of Dubai's real estate ecosystem. In terms of transaction value, Dubai Marina took the top spot at Dhs25.1bn, followed by Business Bay (Dhs22.5bn), Burj Khalifa (Dhs17.1bn), and Palm Jumeirah (Dhs16.96bn). Other high-value areas included Al Yalayis 1 (Dhs15.7bn), Meaisem Second (Dhs15.4bn), Wadi Al Safa 5 (Dhs15.3bn), Airport City (Dhs15.2bn), and Al Barsha South Fourth (Dhs14.9bn). Mohammed Bin Rashid Gardens also stood out with Dhs14.5bn in transaction value. The continued concentration of high-value deals in prime areas signals ongoing demand for luxury and mixed-use developments. Supporting a sustainable real estate ecosystem The Dubai Land Department remains focused on enhancing transparency, streamlining digital services, and improving legislative frameworks to ensure continued growth and investor trust. The department also reaffirmed its commitment to delivering the goals of the Dubai Real Estate Strategy 2033, aligned with the Dubai Economic Agenda D33. These initiatives aim to position Dubai among the top three global economic cities while ensuring the sustainability of the real estate sector as a vital pillar of economic diversification.
Times
4 days ago
- Business
- Times
‘First-time buyers want cheaper homes — not bigger mortgages'
After years of nursing training, Emma Restall decided to carry on her studies to become a doctor, so that her dream of becoming a homeowner might actually become a reality. 'I will be buying by myself and I wouldn't have been able to get a big enough mortgage on a nurse's salary,' said Restall, 28, from Chippenham in Wiltshire. She finished her nursing degree last year and began studying medicine at Newcastle University, working 12 hours a week as a nurse to fund her studies. She is among the first-time buyers who have been locked out of the housing market by high prices and tough mortgage requirements — exactly the sort of people who the chancellor, Rachel Reeves, and regulators are hoping to help by relaxing lending rules. Last week the Bank of England gave banks and building societies dispensation to lend more to borrowers with lower salaries — which the chancellor says will mean 36,000 more mortgages a year for first-time buyers. Banks started offering bigger loans from this week, but critics fear that relaxing the limits could see a return to the high-risk lending that triggered the 2008 financial crisis, while some first-time buyers say they would prefer more affordable housing, rather than government tinkering with the lending rules. Some 42 per cent of first-time buyers asked by the financial services firm Moneybox what the government could do to help said it should build more affordable homes. About 18 per cent said they would like to see looser mortgage affordability rules. Restall said: 'What always seems to be avoided in all these discussions is the gap between the average salary and the average house price. Borrowing more than 4.5 times your salary is nice, but the average house is about eight times salary. And no bank is going to give you that much.' She hopes to have enough saved to finally buy when she finishes medical school in 2029. She will be priced out of buying in Chippenham, so expects to buy in Newcastle instead. Restall has saved about £15,000 into a Lifetime Isa (which pays a 25 per cent government bonus on savings for a first home worth up to £450,000) and hopes to transfer another £4,000 from savings at the start of the next tax year in April. 'It feels like the government and regulators are just patching gaps by tinkering with mortgage rules rather than fixing the real problem — that the housing market is just getting more expensive compared with people's salaries,' she said. Restrictions from 2016 meant that no more than 15 per cent of each bank or building society's new lending could be at more than 4.5 times a borrower's income. This has now been made an industry-wide limit, meaning that lenders have more wiggle room, and can apply to the Bank of England to go beyond the 15 per cent limit — it will keep an eye on the big picture. Nationwide Building Society will now allow a single applicant to borrow up to six times their income if they earn £30,000 (it was £35,000 last week), while joint applicants can borrow up to six times income if they earn a total of £50,000, down from £55,000. Yorkshire Building Society this week cut the minimum salary needed to borrow up to five times your income from £75,000 to £50,000. Last week someone earning £50,000 could have borrowed a maximum of £224,500 whereas now they could get a loan of £250,000. Pressure from Reeves and the Treasury this year have also led almost all high street banks to reduce the interest rate at which they 'stress test' whether borrowers could afford higher payments. Mortgages at 100 per cent loan-to-value, where no deposit is required, have also made a comeback, having largely disappeared under a crackdown on risky lending after the financial crisis. • Thousands of lower earners to be eligible for mortgages in shake-up The Financial Conduct Authority (FCA) — the City regulator — and lenders are also discussing ways to make it easier for first-time buyers to get interest-only loans and for tenants to be able to use their rent track record as proof that they can afford a mortgage. Nikhil Rathi, the FCA chief executive, has called for the government to set out how much risk it is happy for regulators and lenders to take. James Daley from the consumer group Fairer Finance said: 'We have spent the past 17 years tightening up the rules after people borrowed too much, or too many people borrowed interest-only mortgages with no way to repay them. What exactly are we going to achieve by unwinding them now?' The average property sale price in England was 7.7 times the average salary last year, up from 6.6 times in 2004, and it has risen from 5.4 to 5.9 times in Wales over the same period. In March the average first-time buyer borrowed 3.58 times their income, at 77.5 per cent of the average sale price, with an average loan term of 31 years, according to UK Finance, the industry body. Average repayments on first-time buyer mortgages were 22.6 per cent of the average first-time buyer's income in March, the highest share since November 2008, raising concerns that borrowers are already stretching themselves to be able to afford a home. Martin Stewart from the broker London Money said: 'Because of the cost of living and the higher levels of tax households are paying, we are more at risk of borrowers getting into difficulty rather than a 2008-style banking crisis. You're seeing lenders chasing market share, the rules being thrown out of the window and more debt than you can shake a stick at.' Making it easier to borrow does nothing to make house prices more affordable, something lenders have acknowledged by calling for the government to build more homes. The government's planning reforms are expected to help, and the Office for Budget Responsibility expects more housebuilding to reduce the average house price by about 0.8 per cent by 2029. But a big loosening in mortgage lending could undo that. Daley said: 'I'm just disappointed that the conversation on the housing market has come back to affordability and the availability of mortgages, while dancing around the massive elephant in the room, which is the issue of supply. 'Everybody knows that there aren't enough houses and wages haven't kept up with rising prices.' • House prices in expensive areas fall as buyers drive hard bargain Before the financial crisis it was easy to borrow without your income being verified or any checks that you could afford repayments if mortgage rates went up. The banking industry insists it is not on a slippery slope back to those bad old days — stress test rates have been lowered, but not ditched altogether. Bank of England data shows that about 8 per cent of mortgages in the year to March were lent at 4.5 times income or higher, far below the 15 per cent limit. Buyers will be able to borrow larger loans if they can afford them, but will still have to pass affordability checks. Ben Merritt from Yorkshire Building Society said: 'There are customers, including first-time buyers, who can afford to borrow more than 4.5 times their income, who have been shut out of the market. We can now offer them a lifeline to borrow what they need for their dream home in line with our commitment to responsible lending. 'This is crucial in an economic environment where house prices in many parts of the UK continue to rise at a faster rate than incomes.'
