Interest rates are at historically low levels and governments are providing more support than ever to first home buyers.

So if you’re a Victorian who’s looking to enter the market, now might be as good as it gets.

Let’s start with interest rates. Right now, it’s possible to find home loans with interest rates under 2%, which means it’s never been cheaper to repay a mortgage.

Sooner or later, interest rates will rise, but the Reserve Bank is in no hurry to raise the cash rate (which is a benchmark interest rate that influences how lenders price their home loans). Currently, the cash rate is at a record-low 0.10%, and the Reserve Bank has said repeatedly it is unlikely to increase the cash rate until 2024.

How governments are helping first home buyers

While paying off a mortgage has never been easier, entering the market can be challenging.

Thankfully, the Victorian and federal governments have introduced measures to make life easier for first home buyers.

Victorian incentives

• First Home Owner Grant – a $10,000 grant for eligible first home buyers.

• First home buyer duty exemption – eligible first home buyers are exempt from stamp duty if they buy a property valued at under $600,000, or get a 50% stamp duty discount if their property is valued between $600,000 and $750,000.

• Off-the-plan concession – eligible buyers qualify for a stamp duty concession when they purchase off-the-plan properties. This scheme reduces the value of the property by the costs of the construction, reducing the amount of stamp duty to be paid.

• HomesVic Shared Equity Initiative – this scheme helps eligible first home buyers on lower incomes buy a home with a deposit of just 5%, without the need to pay lender’s mortgage insurance (which is generally charged when your deposit is under 20%).

Federal incentives

• First Home Loan Deposit Scheme – eligible first home buyers can purchase an established home with a deposit of just 5%, without the need to pay lender’s mortgage insurance. There are caps on income (up to $125,000 for singles or $200,000 for couples) and purchase price (up to $700,000 in Melbourne and regional centres or $500,000 in the rest of Victoria).

• New Home Guarantee – this is the same as the First Home Loan Deposit Scheme, but for new rather than established homes.

• Family Home Guarantee – eligible single parents can purchase a home with a deposit of just 2%, without the need to pay lender’s mortgage insurance. There are caps on income (up to $125,000) and purchase price (up to $700,000 in Melbourne and regional centres or $500,000 in the rest of Victoria).

Do you want expert advice about buying your first home? Serge Fikir can help. Contact Serge on 0400 886 621 or serge@propertyau.com.au to discuss your options.