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FirstHomeSaver.com.au has today launched the first online First Home Saver account calculator to give young Aussies a clear picture of the savings potential a First Home Saver account has over regular savings accounts.

Launched on 1st October, First Home Saver accounts are a new initiative from the Federal Government designed to give Australians a helping hand into home ownership. Savings in a First Home Saver account attract bonus money from the Government, and like superannuation, earnings are taxed at a low 15%. These benefits aim to boost deposit savings for first time home buyers.

The First Home Saver account calculator uses income and savings variables to project an end balance. The outcome is then compared with a regular savings account, highlighting how much extra could be accumulated via the new accounts.

The Government has today announced a boost to the First Home Owners Grant scheme where first home buyers will be eligible for grants of up to $21,000. This is designed to stimulate the housing market at a time when world economic events have seen home prices begin to decline in Australia, and will help those first time buyers ready to enter the market now.

The new First Home Owners Boost scheme will double the First Home Owners grant for established homes purchases from $7,000 to $14,000; and for first home buyers who purchase a newly constructed home the First Home Owners grant will be tripled taking their grant to $21,000. The First Home Owners Boost scheme starts from today (14 October, 2008), and all contracts entered into by 30 June, 2009 will be eligible.

While this scheme won't help young Australians looking to start a First Home Saver account and planning to save enough to buy a house in several years time, those who felt they were missing out on the benefits of First Home Saver accounts because they want to buy soon will be happy that the Government has today committed approx $1.5 billion to helping 150,000 first home buyers deal with the housing affordability problem.

Read the Prime Minister's press release

The Rudd government's announcement of an increase in the First Home Buyers Grant up to the tune of $21,000 for newly built homes is a very welcome initiative for the building sector, and will help to pull the sector out of a downward slide. According to Prime Minister Rudd good performance in the housing sector is critical for the economy’s overall performance. The increase for first home buyers receiving the grant will provide an incentive to now consider buying or building a first home, following the slowdown in activity from recent tough times.

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Instant gratification through over use of the handy plastic could be a luxury of the past for Generation Y as they struggle to get into the housing market because they are laden with debt.  Despite recent interest rate cuts Gen Y are focussed on paying off debts, particularly credit cards with many moving home to help them get ahead. Are they the new ‘middle-class poor’?

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