Looking to buy your first home? It may just have got a little easier!

The Australian Government has released a new scheme to help first home owners buy their home sooner – known as the First Home Loan Deposit Scheme (FHLDS). The new legislation allows eligible first home buyers to purchase a home with as little as 5% deposit.

Normally purchasing a property with less than a 20% deposit means you’re required to pay Lenders Mortgage Insurance (LMI). However, under this Scheme, the Government will provide the guarantee of up to 15% of the value of the property, thereby increasing your security over the loan to 20%. This then eliminates the need for first home buyers to pay LMI.

The Scheme will be released in stages. From 1 January 2020, 3,000 FHLDS places have been released to eligible first home buyers. A release of a further 7,000 places will be released by 1 February 2020. A further 10,000 FHLDS will be released 1 July 2020.

With over 27 lenders to choose from, eligible first home buyers can shop around to ensure they secure the right product for their needs.


The Scheme is open to both singles and couples. As you would imagine there are several requirements to be eligible for this Scheme. These include:

  1. Income test – A singles taxable income cannot be more than $125,000 per year. A couples combined income cannot be more than $200,000
  2. Prior ownership – you cannot have owned a freehold interest in an Australian property before. This includes residential (as either an investment or owner occupier) or commercial property.
  3. Citizenship test – you must be an Australian citizen.
  4. Minimum age – you must be over 18 years old
  5. Deposit required – you must have a minimum of 5% deposit saved. If you have more than 20% deposit saved, you will not eligible.
  6. Owner occupier requirement – you must move into the property within 6 months of the settlement date and continue to live in the home while the loan is guaranteed under the Scheme.

Property Price Thresholds

The Scheme also sets a cap on the maximum price for the purchase of the home. The cap depends on the location of the property. The cap ranges from $250,000 (South Australia regional) to $700,000 (NSW capital city).

For more information on the applicable caps please visit https://www.nhfic.gov.au/what-we-do/fhlds/property-price-thresholds/

How to apply

If you’re looking to purchase your first home and you believe you’re eligible for the FHLDS, you must apply through a participating lender. To view a list of lenders please visit https://www.nhfic.gov.au/what-we-do/fhlds/how-to-apply/



Kim Jay