First Home Loan Deposit Scheme — Everything you need to know

Find out everything you need to know about this new Federal Government Scheme.

If you’re thinking about buying or building your first home, but you’re having some trouble saving for a deposit, the First Home Loan Deposit Scheme may be the answer to your property dreams

It’s true — 2020 is well underway, bringing with it all the possibilities of a new year. If your resolution is to reap the rewards of home ownership, but you’re still struggling to put together a 20% deposit, don’t give up just yet.

As of January 2020, the Federal Government introduced a new scheme to help first time buyers jump into the property market. The First Home Loan Deposit Scheme (FHLDS) offers loan guarantees with less money saved and no need for Lenders Mortgage Insurance. 

2020 could be your year of homeownership after all!  

How does the FHLDS work?

Under the new scheme, the NHIFC will guarantee a limited number of low-deposit home loans per financial year. This means that eligible first home buyers can receive a home loan with a deposit as low as 5%. 

Since the loan is guaranteed by the Australian Government, Lenders Mortgage Insurance is not necessary, which saves the buyer thousands of dollars in upfront costs.

The NHIFC released 10,000 FHLDS places at the beginning of 2020. 5,000 were made available through NAB and CWBA, while another 5,000 were made available through a list of 25 non-major lenders

10,000 more places will be made available in July 2020.

Who qualifies for the FHLDS?

In order to qualify for the scheme, you must be 18 years or older. You will need to demonstrate that your taxable income is less than:

  • $125,000 per financial year for single applicants
  • $200,000 per financial year for couples. 

You will also need a deposit of at least 5% of the loan you’re applying for.  

The scheme is only available to prospective owner occupiers. It is not available to property investors or those looking to purchase a holiday home.

Other eligibility requirements may apply. For a full list, check the FHLDS website. 

Can you use the FHLDS with other schemes?

The FHLDS can be used alongside other federal government schemes, making it even easier for first home buyers to get onto the property ladder. 

For example, Queensland residents may also qualify for a $15,000 first time buyer’s grant and stamp duty concession, while NSW residents could potentially pick up a $10,000 grant and stamp duty concession.

The schemes, grants and programs available to you differ from state to state. Keep in mind that each scheme will have its own eligibility and property requirements. You will need to do your research to see what’s available and fully understand any terms and conditions:

What kind of property can you buy under the FHLDS?

If you are eligible for the FHLDS, you can use it to purchase: 

The scheme is based on property value, which means there are price caps. These vary from state to state and whether you plan to purchase/build in a capital or regional centre with a population of more than 250,000, or somewhere more remote:

State / TerritoryPrice cap:
capital / regional centre
Price Cap:
rest of the state / territory
ACT $500,000
NSW$700,000$450,000
NT $375,000
QLD$475,000$400,000
SA$400,000$250,000
TAS$400,000$300,000
VIC$600,000$375,000
WA$400,000$300,000

You can also use the NHIFC website to search the postcode or your prospective home to find out which price cap applies to you.

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