The First Home Loan Deposit Scheme is a new initiative by the Australian Government to help first home buyers purchase a home. By providing a guarantee, it allows eligible first home buyers on low and middle incomes to purchase a home with a deposit of as little as 5%.
Compared to the First Home Owners Grant, the difference is that you do not receive a cash benefit from the Government. Rather it is a guarantee of being able to purchase a home with a 5% deposit. So you can eliminate the hassle of trying to save a large sum for a deposit!
First home buyers on low to middle incomes are able to obtain a home loan with a deposit as low as 5%, with the remaining 15% value of the property guaranteed by National Housing Finance and Investment Corporation (NHFIC). The Scheme can be applied to a variety of different residences.
For the 2020-2021 financial year, there will be 10,000 Scheme places available. That sounds like a lot, right? Not quite. In January 2020 alone, 3,000 places were filled!
The Scheme places are being released in stages so first home buyers can gather the necessary financial information to support their application. For example, 10,000 places were released in January-June 2020. Plus, there’s now a broader choice between the major banks and smaller lenders with 25 smaller lenders join in the Scheme’s lending panel on 1 February 2020.
The guarantee (or loans under the scheme) stays in place until the loan is refinanced, you sell your home, move out or until your loan principal balance reduces to below 80% of the value of your property at purchase.
• Must be an Australian Citizen. Unfortunately permanent residents do not qualify.
• Be at least 18 years of age.
• A first home buyer who has not previously owned or had interest in a property in Australia either separately or jointly.
• Singles with a taxable income of up to $125,000 per annum for the previous financial year or couples with a taxable income of up to $200,000 per annum for the previous financial year.
• Intend to be the owner occupier of the property for at least 6 months.
• Couples are only eligible if they are married or in a de-facto relationship with each other.
• The Scheme is to assist singles and couples (together) who have at least 5% deposit saved. If you have 20% or more saved, then you will not be covered.
• Scheduled repayments of the principal and interest of the loan are required for the full period of the agreement.
The First Home Loan Deposit Scheme is an Australian Government initiative that helps eligible first home buyers on low-middle incomes purchase a home with as little as a 5% deposit.
The First Home Loan Deposit Scheme allows buyers on low-to middle incomes to purchase a home with a deposit as little as 5%, with the remaining amount (up to 15%), guaranteed by the National Housing Finance and Investment Corporation.
Eligible participants must be Australian citizens over the age of 18. They must be a first home buyer and intend to occupy the property for at least six months. Singles with a taxable income of up to $125,000 per annum or up to $200,000 for couples may be eligible. Read more here!
Currently, there are 27 participating lenders in Australia offering eligible participants the First Home Loan Deposit Scheme.
If you believe you’re eligible for the First Home Loan Deposit Scheme, chat to our Finance team to discuss how we can help.
Salary thresholds differ depending on whether you’re applying as a single or a couple. Salary thresholds for singles are up to $125,000 or less in the last financial year. A couples combined income must be less than $200,000 in the last financial year.
Want to find out if you’re eligible for the First Home Loan Deposit Scheme? Send us a message and we’ll be in touch!
Over the last 50 years we have proudly built over 15,000 homes for Australian families. We have the same values today as we did in 1969 when we built our first home in Light Street Dianella.
Our commitment is to provide you with complete transparency and give you a real understanding of all aspects of your home loan.