First home loan deposit scheme

First home loan deposit scheme and house and land packages

Saving up for the deposit to buy your first home can be a challenging and time consuming experience, that for many families can take years.

For home buyers looking to buy a house and land package, the First Home Loan Deposit Scheme may be a good option to help you afford the home of your dreams sooner rather than later.

First Home Loan Deposit Scheme

The First Home Loan Deposit Scheme (FHLDS) is an initiative by the Australian Government aimed at providing support for eligible first-time home buyers to purchase a home sooner.

Typically, a deposit of at least 20 per cent is needed to secure a home loan when buying a home, otherwise you are required to pay Lenders Mortgage Insurance (LMI). This scheme allows first-time buyers to purchase a home with a deposit of as little as five per cent of the property value, without the need to take out LMI. This could help save first time buyers up to $10,000.

The Commonwealth Government guarantees the difference between what the buyer has saved and the 20 per cent deposit threshold generally required by lenders.

Designed to help eligible first home buyers get into the property market sooner, this makes it easier for those on low or middle incomes to afford their first home.

FHLDS can be used in conjunction with other government grants, schemes, concessions and waivers you qualify for, including any First Home Owner Grant or stamp duty concessions.

There are limited places with the FHLDS each financial year, but the Australian Government has committed an additional 10,000 places for the 2020-21 financial year.

The ‘New Home Guarantee’ (NHG) was established to support the government's economic stimulus measures and create jobs in the residential construction sector.

Properties eligible for NHG include, newly constructed dwellings, off-the-plan dwellings, house and land packages and land and a separate contract to build a new home.

The borrower purchasing the newly built dwelling must be an eligible first home buyer, owner builder constructions are ineligible.


If you’re saving to buy your first home, it’s worth finding out if you’re eligible for the FHLDS, as it may help you achieve your home buying goals sooner.

Eligibility criteria requires you to be an Australian citizen, at least 18 years of age and you must not have owned or had an interest in residential property (whether as an investment or owner occupied).

Singles and couples may be eligible for FHLDS. Singles must have a taxable income of up to $125,000 per annum, while couples require a combined taxable income of up to $200,000 per annum to be eligible. Couples are only eligible if they are married or in a de facto relationship. Siblings, parent/child or friends buying together are not eligible.

The scheme will apply only to Owner Occupied home loans paid on a principal and interest basis (Interest Only loans and property investment are excluded). If the loan relates both to the purchase of vacant land and the construction of a house on the land, the loan may still be eligible, even if the terms of the loan agreement permit Interest Only payments for a specified period.

Applying for the Scheme

Not all first home buyers will be able to access the FHLDS. With places limited to a set number each financial year, anyone applying for the scheme must meet the set criteria, including any price caps and income restrictions.

You must have a deposit of between five percent and 20 percent of the property’s value to be eligible to apply for FHLDS. You should also be aware that your maximum property purchase price is subject to the suburb and postcode of your new property.

The Government Guarantee can only be received once, but if you have entered the scheme and were unable to purchase a property in time, you can request another place. Places in the scheme are also only offered by a select range of banks.

If you’re buying your first home, whether a house and land package or any other property type, do your research into the various schemes and grants available. You may find you are eligible to receive financial assistance that could help you buy your first home sooner.