Australian citizens who are First Home buyers may buy their first home with just 5% deposit without paying LMI through participating financial institutions under first Home Loan deposit Scheme.
First Home Loan Deposit Scheme places for the 2020-21 financial year are now available through our panel of 27 participating lenders.
The Australian Government has introduced the First Home Loan Deposit Scheme (the Scheme) to assist eligible first home buyers to purchase a home sooner.
It does this by providing a guarantee to participating lenders that will allow eligible first home buyers to purchase a home with a deposit of as little as 5 per cent without needing to pay for lenders mortgage insurance.
The Australian Government operates the Scheme through the National Housing Finance and Investment Corporation (NHFIC).
Through the Scheme, the Australian Government provides a guarantee on an eligible loan provided by a participating lender to an eligible first home buyer.
The guaranteed amount is the difference between the first home buyer’s deposit (of at least 5 per cent) and 20 per cent of the value of the eligible property. It is similar to parental or family guarantees which already exist, but in this case the Australian Government acts as the guarantor.
By providing this guarantee, an eligible first home borrower no longer has to pay lenders’ mortgage insurance.
While there are no costs or repayments associated with the Scheme guarantee, you are responsible for meeting all costs and repayments for the home loan associated with the guarantee. You also need to observe the requirements of the Scheme for as long as you’re covered by the guarantee.
There are 10,000 guarantees released to the participating lender panel each financial year (1 July to 30 June).
The guarantee stays in place until the loan is refinanced, you sell your home, move out or until your loan principal balance reduces to below 80 per cent of the value of your property at purchase.
First Home Loan Deposit Scheme complements existing state and territory First Home Owner Grant programs, stamp duty concessions and other grant schemes, as well as the Commonwealth’s and First Home Super Saver Scheme and HomeBuilder Scheme.
If you move away for an extended period and your home becomes an investment property (i.e. you rent it out to tenants), then your home loan may no longer be guaranteed under the Scheme. If your move is a temporary one and you do not rent out your house (i.e. it remains your home) then your home loan may continue to be guaranteed under the scheme.
Before moving out (or if you believe you may need to move out), you should discuss this with your lender so that you are fully aware of your responsibilities under the Scheme and the policies of your lender. If your home loan is no longer guaranteed under the Scheme, your lender may require you to take certain actions (including paying fees and/or charges or taking out lenders mortgage insurance).
Eligibility Criteria
1. Single person or couple including de facto
2. Must be Australian citizen/s.
3. Applicant/s must be 18 years of age.
4. None must have any interest or owned a property in Australia before.
5. Must buy the property in Australia
6. Must buy the property as individual/s
7. Must purchase the property to live in as principal place of residence.
8. Individual applicant’s last FY income must be less than $125K and for couple combined income must be less than $200K
The property price thresholds (maximum property purchase price under the Scheme) for Australian capital cities, large regional centres and regional areas are detailed below:
| Region ID | Region | Price Cap ($AUD) |
| 1 | NSW - capital city | $700,000 |
| 2 | NSW - regional centre (Newcastle and Lake Macquarie) | $700,000 |
| 3 | NSW – regional centre (Illawarra) | $700,000 |
| 4 | NSW – other | $450,000 |
| 5 | VIC – capital city | $600,000 |
| 6 | VIC – regional centre (Geelong) | $600,000 |
| 7 | VIC – other | $375,000 |
| 8 | QLD – capital city | $475,000 |
| 9 | QLD – regional centre (Gold Coast) | $475,000 |
| 10 | QLD – regional centre (Sunshine Coast) | $475,000 |
| 11 | QLD – other | $400,000 |
| 12 | WA – capital city | $400,000 |
| 13 | WA – other | $300,000 |
| 14 | SA – capital city | $400,000 |
| 15 | SA – other | $250,000 |
| 16 | TAS – capital city | $400,000 |
| 17 | TAS – other | $300,000 |
| 18 | ACT | $500,000 |
| 19 | Northern Territory | $375,000 |
| 20 | Jervis Bay Territory & Norfolk Island | $450,000 |
| 21 | Christmas Island & Cocos (Keeling) Island | $300,000 |
The capital city price caps apply to large regional centres with a population over 250,000 (the Gold Coast, Newcastle and Lake Macquarie, the Sunshine Coast, Illawarra (Wollongong) and Geelong), recognising that dwellings in large regional centres tend to be significantly more expensive than other regional areas.