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Sav­ing for a house deposit can be one of the largest (if not the largest) bar­ri­ers to entry for many first home buy­ers. Cur­rent­ly, the only way to delve into the prop­er­ty mar­ket is to save at least 20% of the property’s val­ue in order to secure a home loan, alter­na­tive­ly rely on a guar­an­tor, or go down the route of pay­ing for Lenders Mort­gage Insur­ance or a Low Deposit Pre­mi­um.

In response to this bar­ri­er, the Aus­tralian Gov­ern­ment has intro­duced a First Home Loan Deposit Scheme (FHLDS) which sup­ports eli­gi­ble first home buy­ers on low and mid­dle incomes to pur­chase their first home with a deposit as lit­tle as 5 per cent.


How does the FHLDS work?

Under the FHLDS, eli­gi­ble bor­row­ers will be required to pro­vide a min­i­mum of 5% of the property’s val­ue towards the deposit. The Nation­al Hous­ing Finance and Invest­ment Cor­po­ra­tion (NHFIC) will then guar­an­tee the remain­ing 15%.

The Scheme is sim­i­lar to a parental or fam­i­ly guar­an­tee which already exist, how­ev­er in this case, the NHFIC will act as your guar­an­tor.

The Scheme will sup­port up to 10,000 first home loan guar­an­tees each finan­cial year and can be used 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 Scheme is not a cash pay­ment or a deposit for your home loan.


What prop­er­ties are eli­gi­ble under the Scheme?

Sev­er­al prop­er­ty types are eli­gi­ble under the Scheme, how­ev­er they are also con­trolled by prop­er­ty price thresh­olds depend­ing on the loca­tion of the prop­er­ty.

Eli­gi­ble prop­er­ty types include:

  • 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

Prop­er­ty price thresh­olds vary for cap­i­tal cities (and region­al cen­tres) and the rest of the state. You can read them here.


Am I eli­gi­ble?

There are sev­er­al require­ments to be eli­gi­ble under the Scheme. The eas­i­est way to check your eli­gi­bil­i­ty is to use the online test via the NHFIC web­site here.


What else do I need to con­sid­er with the Scheme?

Some oth­er impor­tant aspects to keep in mind when con­sid­er­ing the FHLDS include:

  • Canstar.com.au found that 41% of peo­ple oppose the FHLDS due to the risks asso­ci­at­ed with first home buy­ers finan­cial­ly over­com­mit­ting.
  • Be sure to speak with your lawyer, your accoun­tant and a finan­cial insti­tu­tion that is a reg­is­tered FHLDS provider either direct­ly or through your mort­gage bro­ker to look at your own per­son­al sit­u­a­tion.
  • Ensure you make a well-informed deci­sion about where to buy your prop­er­ty in terms of its mar­ket prospects and cap­i­tal growth, as opposed to buy­ing a prop­er­ty based on the price cap. Ensure you do your mar­ket research.
  • You can only use finan­cial insti­tu­tions that are par­tic­i­pat­ing lenders under this Scheme. Take a look at the list of par­tic­i­pat­ing lenders here.
  • You can only receive the Gov­ern­ment guar­an­tee once.


Where can I find out more infor­ma­tion?

If you are look­ing for more infor­ma­tion on the FHLDS, take a look here:


If you would like to find out more about the First Home Buy­er Deposit Scheme, read our blog here.

If you would like to find out more about how the pur­chas­ing process works, down­load our FREE con­veyanc­ing e-guide here.

For fur­ther infor­ma­tion please con­tact Dono­van Oates Han­naford on 02 6583 0400 or info@dohlaw.com.au.

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