A simple fact sheet on the First Home Loan Deposit Scheme

 In Lifestyle

What is the First Home Loan Deposit Scheme?

The Australian Government is introducing a First Home Loan Deposit Scheme (FHLDS) to help eligible first home buyers to purchase a home sooner. The Government is doing this by providing a guarantee that will allow eligible first home buyers on low and middle incomes to purchase a home with a deposit of as little as 5 per cent.   The First Home loan deposit scheme (FHLDS) will support up to 10,000 first home loan guarantees each financial year.  Eligible borrowers can also use this guarantee in conjunction with other government programs like the First Home Super Saver Scheme, state and territory First Home Owner Grants and stamp duty concessions.

The guarantee is not a cash payment.


How will the First Home Loan Deposit Scheme help?

In the majority of cases, (whilst some waivers do apply) borrowers who borrow more than 80% of the value of the property (in other words, have less than a 20% deposit Plus costs)  will have to pay Lenders Mortgage Insurance (LMI).  Lenders Mortgage insurance is calculated on a sliding scale and can cost thousands of dollars.   The First Home loan deposit scheme is aimed to satisfy the security requirements of the lender so that the borrower will no longer need to pay Lenders Mortgage Insurance.


Am I Eligible for the First Home Loan Deposit Scheme?

Who is eligible?

  • Australian citizens who are at least 18 years of age.
  • Permanent residents are not eligible.
  • Singles with a taxable income of up to $125,000 gross p.a and couples with a taxable income of up to $200,000 gross p.a.
  • Incomes will be assessed for the financial year preceding the financial year in which the loan is entered into.
  • Couples are only eligible for the scheme if they are married or in a de-facto relationship.
  • Other persons buying together, including siblings, parent/child or friends, are not eligible for the Scheme.
  • Applicants must have a deposit of between 5%-20% of the property’s value.
  • Loans under the Scheme require scheduled repayments of the principal of the loan for the full period of the agreement. (i.e. Principal and interest repayments)
  • If the loan relates both to the purchase of vacant land and to the construction of a house on the land, the loan may be an eligible loan even if the terms of the loan agreement permit interest-only repayments for a specified period.
  • Applicants must intend to move into and live in the property as their principal place of residence (i.e. they must be owner occupiers).
  • Applicants must be first home buyers who have not previously owned or had an interest in a residential property either separately or jointly with someone else (this includes residential strata and company title properties, regardless of whether it was an investment or owner-occupied property and whether it was ever lived in).


What sort of property can be bought under the First Home Deposit Scheme?

  • An existing house, townhouse or apartment
  • A house and land package
  • Land together with a separate contract to build a home
  • An off-the-plan apartment or townhouse.


When does the First Home Loan Deposit Scheme start?

The First Home Loan Deposit Scheme will start on 1 January 2020.Applications for the Scheme are not yet open.


How do I apply?

  • Borrower applications will be managed via a panel of participating lenders.
  • Applications for the Scheme are not yet open.
  • Once the scheme starts, applications will need to be lodged through the participating lenders and brokers.
  • The NHFIC will not accept or process applications directly


Is there a property threshold limit?

Yes, the purpose of the First home Loan deposit Scheme is to help buyers to purchase a modest home and the Government has therefore capped prices depending on their location

The value of the residential property must not exceed the price cap for the area in which the property is located.


The capital city price thresholds below apply to regional centres with a population over 250,000 (i.e. the Gold Coast, Newcastle and Lake Macquarie, the Sunshine Coast, Illawarra (Wollongong) and Geelong).  You can Look up your suburb or postcode on the NHFIC website to see the property price threshold – www.nhfic.gov.au/what-we-do/fhlds/eligibility/


State / Territory Capital City & Regional areas Rest of the State
NSW $700,000 $450,000
VIC $600,000 $375,000
QLD $475,000 $400,000
WA $400,000 $300,000
SA $400,000 $250,000
TAS $400,000 $300,000
ACT $500,000
NT $375,000

If you need more information or clarification, please Call Amanda on 0409 715577

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