First Home Loan Deposit Scheme: What first home buyers need to know

What is the First Home Loan Deposit Scheme?

The First Home Loan Deposit Scheme is an Australian Government initiative designed to assist Australians in entering the property market sooner.

For example, if a first time buyer using the scheme has saved only 5% of the value of a property, the government can essentially act as a guarantor for 15%, thereby providing the buyer with the 20% security typically required to be approved for a home loan without having to pay for LMI.

It’s important to clarify the guarantee is not a cash payment to the first time buyer. Rather, it’s like a promise from the government to the buyer’s home loan lender that should the buyer fail to repay their home loan, the government will pay the lender the guaranteed amount (15% in the above example).

The guarantee will be limited to 10,000 loans each year to first home buyers on a first-in, best-dressed basis, and only applies to owner-occupied loans with principal and interest repayments.

The scheme is being administered through the National Housing Finance and Investment Corporation (NHFIC) in partnership with lenders.

In a statement, Prime Minister Scott Morrison said, “The NHFIC will partner with private lenders to deliver the First Home Loan Deposit Scheme, prioritising smaller lenders to boost competition.”

Support will stay in place for the life of the loan. If the borrower decides to refinance to a new loanor lender, the guarantee will end.

First home buyers are able to use the scheme in conjunction with other first home buyer benefits, such as the First Home Super Saver Scheme and state or territory first home buyer grants and stamp duty concessions.

Who is eligible for the First Home Loan Deposit Scheme?

Only Australian citizens (not permanent residents) are eligible for the scheme.

An income threshold will apply. Singles with a taxable income of up to $125,000 a year, and couples with a joint income of $200,000 are eligible provided it’s their first home loan and they are both first home buyers.

Couples must be married or in a de facto relationship. Other people buying together such as friends, siblings, parent/child and so on cannot apply for the scheme together.

Applicants must have at least 5% of the value of the property saved. Applicants also must intend to buy the property and move into it as their primary place of residence (so they must be owner occupiers, not investors).


What types of property can I buy under the First Home Loan Deposit Scheme?

According to the NHFIC, an eligible first home buyer can purchase any of the following property types under the scheme:

  • A new or 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 caps

To make sure the scheme is only available for the purchase of an entry-level home, property price caps will apply. These price thresholds will be different in the various states and territories to reflect the different median house prices.

Region Capital city and regional centres* Rest of state Other
NSW $700,000 $450,000
VIC $600,000 $375,000
QLD $475,000 $400,000
WA $400,000 $300,000
SA $400,000 $250,000
TAS $400,000 $300,000
ACT $500,000
NT $375,000
Jervis Bay Territory and Norfolk Islands $450,000
Christmas Island and Cocos (Keeling) Islands $300,000

*A regional centre is defined as a city with a population above 250,000, such as Geelong, the Gold or Sunshine Coast, Newcastle, Wollongong, etc.


Which lenders are taking part in the First Home Loan Deposit Scheme?

There are 27 lenders taking part in the scheme, comprised of two ‘big four’ lenders and 25 non-major lenders.

The two major lenders will get a head start in the application process, with approval to offer loans from 1 January 2020. The remaining 25 non-major lenders will be able to take applications from 1 February 2020.

The two major lenders will be allocated half of the 10,000 loans, with the remaining 5,000 going to the remaining 25 non-major lenders.

According to the NHFIC, the following lenders will take part in the scheme:

Major bank lenders:

Non-major lenders:

  • Australian Military Bank
  • Auswide Bank
  • Bank Australia
  • Bank First
  • Bank of us
  • Bendigo Bank
  • Beyond Bank Australia
  • Community First Credit Union
  • CUA
  • Defence Bank
  • Gateway Bank
  • G&C Mutual Bank
  • Indigenous Business Australia
  • Mortgageport
  • MyState Bank
  • People’s Choice Credit Union
  • Police Bank (including the Border Bank and Bank of Heritage Isle)
  • P&N Bank
  • Queensland Country Credit Union
  • Regional Australia Bank
  • Sydney Mutual Bank and Endeavour Mutual Bank (divisions of Australian Mutual Bank Ltd)
  • Teachers Mutual Bank Limited (including Firefighters Mutual Bank, Health Professionals Bank, Teachers Mutual Bank and UniBank)
  • The Mutual Bank
  • WAW Credit Union

How do I apply for the First Home Loan Deposit Scheme?

Prospective first home buyers can submit applications directly through the participating lender of their choice. The NHFIC will not be accepting applications directly.


First Home Loan Deposit Scheme: What first home buyers need to know

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