First Home Loan Deposit Scheme

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Marty McDonald - Thursday, July 01, 2021

From July 1st 2021 the Australian Government in conjunction The NHFIC (National Housing Finance & Investment Corporation) is assisting eligible home buyers to purchase a home sooner with a deposit of as little as 5%. They are providing 10,000 guarantees on eligible home loans per year.

First home buyers with less than a 20% deposit usually need to pay LMI (lenders mortgage insurance).

Under this Scheme, the NHFIC will guarantee part of an eligible first home buyer’s home loan from a participating lender up to a maximum amount of 15% of the value of your property. This guarantee is not a cash payment or a deposit for your home loan.

What type of property can a first home buyer buy under the scheme? It must be a ‘residential’ property which includes an existing house, townhouse or apartment, house and land package, land and a separate contract to build a home, or an off-the-plan apartment or townhouse.

Is there a property price threshold? Yes, and the value of the residential property must not exceed the relevant price cap for the area in which it is located. To find out what your threshold might be use the Search engine on NHFIC’s website at www.nhfic.gov.au/what-we-do/first-home-loan-deposit-scheme/

How do I know if I am eligible?

  • You must be 18 and an Australian citizen (Permanent residents are not eligible).
  • Single applicants need to have taxable income of up to $125,000 per annum for 2020-21 financial year and couples combined taxable income $200,000 per annum for the 2020-21 period.
  • Couples are only eligible for FHLDS if they are married/de-facto relationship with each other. If you intend to buy with a sibling, parent/child or friends you are not eligible.
  • FHLDS assists single (individual) applicants and couples (together) who have at least 5% of the value of an eligible property saved as a deposit.
  • Scheduled repayments are of the principal & interest of the loan for the full period of the agreement (if construction lending there are limited exceptions for an interest-only loan)
  • You must intend to be owner-occupiers of the purchased property ie. Live in it. Investment properties are not allowed.
  • You must be first home buyers who have not previously owned, or had an interest in, a property in Australia, either separately or jointly with someone else.

How do I apply? Contact us of course. You will need to choose a lender who is an official ‘participating’ lender and who is also on our panel of lenders. Two of the major bank lenders, CBA and Nab, and many smaller credit union style lenders area available. Head to www.nhfic.gov.au/what-we-do/first-home-loan-deposit-scheme/ to find out which lenders are on the list.

About the Author: Marty McDonald is principal of mortgage broker “Mortgage Experts”. Marty specialises in assisting active property investors with loan structuring advice and implementation as well as helping credit worthy borrowers with slightly outside the box income and employment situations. Find Marty on  and LinkedIn.