Have you considered the First Home Loan Deposit Scheme?


First home buyers could save as much as $10,000 under the new First Home Loan Deposit Scheme (FHLDS) introduced by the Government in January this year.

Saving a deposit to purchase your first home can be challenging and can take time. In today’s market, individuals typically need to save at least 20% of a property’s value in order to secure a home loan without paying Lenders Mortgage Insurance or relying on a guarantor. The FHLDS is designed to help first home buyers purchase a home sooner by providing a guarantee that allows low and middle income earners to purchase a home with a deposit of as little as 5 per cent, without the need to take out Lenders Mortgage Insurance. The Government claims that this could save first home buyers up to $10,000.

The Scheme is offered to a limited number of applicants; initially, 10,000 places were available on 1 January 2020. A further 10,000 places have been made available since 1 July 2020 for the 2020-2021 financial year.

First home buyers must meet the following eligibility requirements to apply for the scheme:

  • They must be Australian citizens who are at least 18 years of age.
  • Have a taxable income of up to $125,000 per annum as a single individual, or have a taxable income of up to $200,000 per annum as a couple.
  • Couples must be married or in a de-facto relationship to apply.
  • Must have a deposit of between 5 to 20 per cent of the property’s value.
  • Must intend to move into and live in the property as their main residence.
  • Loans under the scheme must have scheduled repayments for the principal of the loan for the full period of the agreement.

There are few restrictions on the type of property the FHLDS covers, and both newly-built and established properties qualify. The scheme permits the purchase of:

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

For a residential property to be eligible under the FHLDS, it must not exceed the property price cap (the maximum property purchase price) for its location. Property price caps vary depending on the state and whether the property is located in a capital city or regional area. Refer to your state’s price cap for further details.

The FHLDS can be used in conjunction with other government grants, schemes, or concessions. This includes the First Home Owner Grant and stamp duty concessions.


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