First Home Loan Deposit Scheme

First home loan deposit scheme

The First Home Loan Deposit Scheme (FHLDS) aims to help more Aussies buy their own home sooner. Find out if you’re eligible before time runs out!

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First home loan deposit scheme explained

The First Home Loan Deposit Scheme (FHLDS) is a government program that helps first home buyers purchase a home with a deposit as low as 5%.

Traditionally, buyers needed a 20% deposit to purchase a home. Low deposit mortgages already exist and are a great option, but you’re required to purchase Lenders Mortgage Insurance (LMI), which often costs thousands. Under the FHLDS you won’t be required to purchase LMI.

The FHLDS isn’t a cash payment or grant. Instead, the government guarantees part of your deposit. For example, if you’re buying a $400,000 home with a $30,000 deposit, the government will guarantee the first $50,000 of your loan, effectively bringing you up to the full 20% deposit of $80,000.

The Australian government is providing 10,000 new spaces in the FHLDS for eligible home buyers during 2021-22, and they will be available from July 1, 2021.

The FHLDS was also offered last year, and the scheme was so popular that all 10,000 places were filled in just a few months. If you want to take advantage of the offer it’s important to apply as soon as you’re ready.

The FHLDS is designed for singles and couples buying their first home. Couples are only eligible if they’re spouses or de facto partners. Other people buying together, like siblings or two friends, aren’t eligible for the scheme.

To access the FHLDS you and your spouse need to:

  • Be Australian citizens who are at least 18 years old (permanent residents are not eligible)
  • Be first home buyers who haven’t previously owned any property
  • Have a maximum income of $125,000 for singles, or a maximum combined income of $200,000 for couples
  • Save a cash deposit between 5-20% of the home’s value
  • Be buying a house to live in, and move in within 6 months
  • Stay in your new home for as long as it’s subject to an FHLDS guarantee
  • Meet your lender’s borrowing criteria
  • Comply with the FHLDS borrowing limits
If you’re eligible for the scheme and meet your lender’s criteria, the amount you can borrow for your new home depends on where you’re buying:

State /
Capital city /
regional centre
Rest of state
QLD $600,000 $450,000
NSW $800,000 $600,000
VIC $700,000 $500,000
WA $500,000 $400,000
SA $500,000 $350,000
TAS $500,000 $400,000
ACT $500,000 N/A
NT $500,000 N/A

The FHLDS can only be used to buy residential property that you and your partner intend to live in, and you have to move in within 6 months of settlement. Investment properties are not eligible for the scheme.

Eligible properties include:

  • House and land packages
  • Off-the-plan apartments or townhomes
  • Land and a separate building contract
  • Existing houses, apartments and townhomes

Applications for the FHLDS are made through participating banks and lenders as part of your mortgage application. The lenders who are taking part in the scheme will assess your suitability and submit your application to the government on your behalf.

which banks and lenders are involved in the scheme?

There are currently 33 lenders taking part in the FHLDS, including major banks and non-major lenders.

If you take out a mortgage through the FHLDS you won’t be required to purchase LMI, and your interest rate will be the same as it would be if you took out the loan without an FHLDS guarantee.

We always recommend our customers shop around for the lender and the deal that suits them best. For help figuring out which participating lender is the best fit, we encourage you to contact the friendly Buildtoday team and ask one of our New Home Guides for help.

is the FHLDS compatible with the first home owners grant?

The FHLDS is compatible with several other government grants and schemes, including the First Home Owner Grant (FHOG):

First Home Owner Grant

The First Home Loan Deposit Scheme and your state’s First Home Owner Grant (FHOG) are compatible. Whether your FHOG can be used as part of your deposit depends on where you are. We encourage you to contact our team and speak to a New Home Guide about whether you’re eligible for both schemes and whether your FHOG can be used as a deposit.

First Home Super Saver

The FHLDS and the First Home Super Saver (FHSS) scheme are compatible. Under the FHSS you can use voluntary super contributions to save a house deposit up to $50,000. When you’re ready to buy a home, you can access the money you saved under the FHSS, including any income it might have generated.

check your eligibility now!

If you’d like to know more, have other questions or are wanting to check your eligibility, get in touch today!

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