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first home loan deposit scheme

About The First Home Loan Deposit Scheme

February 7, 2020

If you’re buying your first home & land package for under $300,000 at Vasse Estate, read on! You might be able to get your house faster than you think.

The First Home Loan Deposit Scheme helps first home buyers purchase their home faster. Eligible first home buyers can buy a home with a deposit of just 5%.

This is an initiative from the Australian Government, and it is administered by the National Housing Finance and Investment Corporation (NHFIC).

How Does The First Home Loan Deposit Scheme Work?

Usually, you need to save at least 20% of the property’s value to get a home loan and avoid paying a Low Deposit Premium or  Lenders Mortgage Insurance. Under the First Home Loan Deposit Scheme, eligible first home buyers can purchase a home with a deposit of just 5% of the property’s value. The NHFIC provides a guarantee for the remaining 15% of the deposit.

Eligibility Criteria for the First Home Loan Deposit Scheme

  • Australian citizens who are aged 18 years or more. Permanent residents are not eligible.
  • Applicants must not have previously owned or had an interest in a residential property, either separately or jointly with someone else.
  • Annual taxable income for singles – $125,000 or less. Combined annual taxable income for couples – $200,000 or less. Other people buying together – such as siblings, parent/child or friends, are not eligible.
  • Applicants must have a deposit of between 5% and 20% of the property’s value.
  • The Scheme only applies to Owner Occupied home loans paid on a principal and interest basis. Property investment and Interest Only loans are excluded. If the loan relates a new house and land purchase (ie, vacant land and the construction of a house on that land), the loan may still be an eligible loan, even if the terms of the loan agreement allow Interest Only payments for a specified period.
  • Your maximum property purchase price for Vasse Estate is a House and Land Package value of up to $300,000.
  • You can only receive this Government Guarantee once.

View the NHFIC Eligibility Tool here.

When Does It Run?

The Scheme started on 1 January 2020. NHFIC is releasing 10,000 First Home Loan Deposit Scheme guarantees this financial year. Another 10,000 guarantees will be available from July 2020.

How To Apply

The NHFIC appointed 27 lenders on the panel of residential mortgage lenders to offer guarantees under the Scheme. This includes National Australia Bank and Commonwealth Bank of Australia, as well as 25 non-major lenders.

The 25 non-major lenders began offering guaranteed loans on 1 February 2020.

It is a requirement that the NHFIC participating lenders in this scheme will not charge eligible customers higher interest rates than equivalent customers outside the scheme.

You need to contact the lenders directly to access the Scheme. View who they are and link through here.