First Home Buyers can ring in the New Year with a wonderful opportunity. As of the 1st of January 2020, the First Home Loan Deposit Scheme will begin, allowing more First Home Buyers to enter the property market sooner rather than later. So what is the First Home Loan Deposit Scheme? Why? How? Who?

Posted in: Insights, News


The Australian Government has introduced the First Home Loan Deposit Scheme (FHLDS) to support First Home Buyers with the purchase of their first home by providing a guarantee to eligible low and middle income earners with a deposit of only 5 percent. Beginning on the 1st of January, this is a great way for First Home Buyers to ring in the New Year, by accelerating the home buying journey.

The FHLDS will be capped at 10,000 guarantees per financial year. Eligible First Home Buyers will still have the ability to utilise existing benefits such as the First Home Super Saver Scheme and relevant State & Territory First Home Owners Grants / Stamp Duty Concessions in conjunction with the FHLDS.

The FHLDS is not a cash payment. It will work similarly to a family guarantee, where the Government will provide added guarantee security to reduce loan to value ratio (LVR) and eliminate Lenders Mortgage Insurance (LMI). This will result in a buyer’s ability to utilise more of their borrowed funds to assist with the purchase costs rather than paying for LMI, which enables a smaller deposit to be used more effectively.

Eligible Properties:

  • Established homes, townhouses and apartments
  • House & land packages
  • Land purchase with separate build contracts
  • Off-the-plan apartments or townhouses

Property price thresholds do apply. With the scheme targeting low to middle income earners, the purpose is to assist with the purchase of a modest and affordable first home. The value of the purchase property must not exceed the following price caps which are designated to capital cities, large regional centres and regional areas:

SA:  Capital City or Regional Centre = $400,000 / Rest of State = $250,000

NSW:  Capital City or Regional Centre = $700,000 / Rest of State = $450,000

VIC:  Capital City or Regional Centre = $600,000 / Rest of State = $375,000

QLD:  Capital City or Regional Centre = $475,000 / Rest of State = $400,000

WA:  Capital City or Regional Centre = $400,000 / Rest of State = $300,000

TAS:  Capital City or Regional Centre = $400,000 / Rest of State = $300,000

ACT:  Capital City or Regional Centre = $500,000

NT:  Capital City or Regional Centre = $375,000

Other regions of note:

Jervis Bay Territory: $450,000                                                             

Norfolk Island: $450,000

Christmas Island: $300,000

Cocos (Keeling) Islands: $300,000       

Please note: Capital city price caps apply to regional centres with populations above 250,000 such as the Gold Coast, Newcastle, the Sunshine Coast etc.

Eligibility Requirements:

  • 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 per annum and couples with a taxable income of up to $200,000 per annum. 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 and 20 per cent 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. If the loan relates both to the purchase of vacant land 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).

The FHLDS is limited to a selected panel of 25 smaller lenders and 2 of the Big Four banks in the CBA and NAB. Applications will be accepted once the scheme is open as of January 1 2020, with applications to be lodged through your Mortgage Broker and/or the participating lenders. Direct applications to the NHFIC will not be accepted.

To look up a suburb you might be interested in, visit the NHFIC website to see the property price cap:

To find out more about which lenders we can help you with, speak with a Bernie Lewis Home Loans Mortgage Broker today.

Source: NHFIC – First Home Loan Deposit Scheme Fact Sheet, November 19.

*The information provided in this article is general in nature and does not take into account your personal circumstances. Since everyone's personal situation is different, this article should not be taken as advice. The figures used in this article are to be used as a guide only. Depending on your personal circumstances, these numbers may vary. We recommend you seek individual advice with a mortgage broker.