The National Housing Finance and Investment Corporation (NHFIC) has announced a historic First Home Loan Deposit Scheme (FHLDS), and it represents arguably the best time in recent history for first home buyers to enter the property market.

What is the First Home Loan Deposit Scheme (FHLDS)?

The FHLDS will allow for first-home buyers to deposit as little as five per cent towards a home with the scheme providing a guarantee covering up to 15% of the property’s value. 

This means you won’t have to either pay mortgage lender’s insurance or get a guarantee from family or friends, which is otherwise standard practice for securing a home loan with less than a 20% deposit.

Who is eligible for the FHLDS?

It?s available to low and middle-income Australian citizens over the age of 18 who are purchasing their first property. If you are a couple, one needs to be an Australian citizen. Only couples or singles can apply, so you can’t apply as part of a larger group or with someone who is not your spouse or partner. 

You’re also required to live in the property you have bought.

The scheme is also subject to an income requirement to ensure only those that need it most are considered for a loan. 

For singles, you must have made $125,000 or less in taxable income last financial year, and for couples, you must not have made more than $200,000.

How much can I borrow under the FHLDS?

It depends on your state as median prices differ across the country, but what is common is that you will only be able to borrow a modest amount which generally falls under the region’s median house price.

In metropolitan Melbourne and Geelong, you can take out a loan for properties costing up to $600,000 ($375,000 in regional Victoria). In Metropolitan New South Wales, you borrow on properties costing up to $700,000.

To see the full list covering how much you can borrow in each state and territory of Australia, click here.

How do I apply for the FHLDS?

The FHLDS will begin to accept applications with Commonwealth Bank and NAB from January 1, 2020, and on February 1, 25 non-major lenders will also accept applications. 

It’s limited to 10,000 successful applications each financial year, 5000 with the two major banks and 5000 with the participating non-majors.

Please note that the NHFIC does not offer financial advice to applicants around how to structure their home loan in a way that best suits their circumstances. This is why you’ll still need a trusted mortgage broker to give professional advice and help you get the best loan for you through the scheme.

Act fast and get into the market while you can. If you’d like to make an application book a chat with us.

Emmanuel Guignard (MBA)
Director & Principal Mortgage Broker
With over 15 years’ experience in the finance industry and a recently completed MBA in Financial Planning, Emmanuel leads the broking team at Loanscope. His experience includes working with a wide range of property investors, from first time buyers to investors with large property portfolios. This includes handling complex applications involving trusts, company structures and self-managed super funds. He also operates as a qualified mentor to other mortgage brokers via the FBBA mentor program.
Emmanuel Guignard