First Home Loan Deposit Scheme explained (FHLDS).

Wednesday, February 5, 2020

The First Home Loan Deposit Scheme is a Australian Government initiative to support eligible first home buyers purchase a home sooner. It does this by providing a guarantee that will allow eligible first home buyers on low and middle incomes to purchase a home with a deposit of as little as 5 per cent (lender’s criteria apply), which allows the client to avoid paying LMI.

Since starting on 1 January, the CBA and NAB have registered 3,000 potential first home buyers under the First Home Loan Deposit Scheme.

The remaining 7,000 Scheme places for the current financial year will be available from 1 February 2020 when potential applicants will have a panel of 27 lenders to choose from.

NHFIC is releasing 10,000 First Home Loan Deposit Scheme guarantees this financial year. Another 10,000 places will be available from July 2020.

The staged release of Scheme places provides first home buyers with the opportunity to gather the necessary financial information to support their application and enables a broader choice between the major banks and smaller lenders. Twenty-five smaller lenders join the Scheme’s lending panel on 1 February.

Its possible to qualify for the scheme and obtain the FHOG.

All participating lenders have committed not to charge eligible first home buyers higher interest rates than equivalent customers outside of the Scheme.


The key checks for your personal circumstances are:

    • an income test
      singles – your taxable income for the previous financial year must not be more than $125,000
      couples – your combined taxable income for the previous income year must not be more than $200,000.
    • a prior property ownership test:
      The property ownership test requires you to not have ever owned:
      a freehold interest in real property in Australia
      an interest in a lease of land in Australia with a term of 50 years (or more), or
      a company title interest in land in Australia.
    • a minimum age test -18yo
    • a deposit requirement- at least 5% and less than 20%
    • an owner-occupier requirement: move into the property within 6 months from the date of settlement or, if later, the date an occupancy certificate is issued, and continue to live in that property for so long as your home loan has a guarantee under the Scheme.
    • Property types: can be house and land, can be off the plan (conditions apply)
    • Property price thresholds
      NSW – capital city $700,000
      NSW – regional centre (Newcastle and Lake Macquarie) $700,000
      NSW – regional centre (Illawarra) $700,000
      NSW – other – includes Byron Bay $450,000
      VIC – capital city $600,000
      VIC – regional centre (Geelong) $600,000
      VIC – other – includes Warrnambool – $375,000
      QLD – capital city $475,000
      QLD – regional centre (Gold Coast) $475,000
      QLD – regional centre (Sunshine Coast) $475,000
      QLD – other $400,000

If a spot is reserved in the scheme, but you don’t obtain loan approval or buy a property in the timeframe required, you lose their spot in the scheme and the lender will let the next person on the waiting list know, and the client will need to reapply to the scheme.

Non-major lenders participating in the scheme:

  • 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 (could be limited to WA – Rafer?)
  • 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