A Guide to the First Home Loan Deposit Scheme

01st Sep, 2020 | First Home Buyer

In this article:
The First Home Loan Deposit Scheme is enjoying phenomenal response. If you are considering applying for it, keep in mind it has limited places. Here's a quick guide detailing benefits, eligibility criteria as well as some tips to make the most of this scheme

Among the many schemes and incentives announced by the federal government, the First Home Loan Deposit scheme has enjoyed great  response from first home buyers. Here’s a quick look at its features, eligibility criteria and some things to keep in mind.

What is it?

Launched on January 1, 2020, the First Home Loan Deposit Scheme (FHLDS) is an incentive by the federal government to help first home buyers get on to the property ladder faster. When a borrower has less than 20% of the property cost for a loan deposit, lenders buy LMI (Lender Mortgage Insurance) to protect themselves against possible repayment default. The cost of the LMI is passed on to the borrower in the form of a larger repayment amount that increases the overall cost of the home-loan. Under FHLDS, the federal government bears the cost of this LMI, making the mortgage a lot more affordable for a first home buyer.


To be eligible for the Scheme you need to

  • Be over 18 years of age
  • Be an Australian citizen (non-Australian Citizens – including Permanent Residents are ineligible)
  • Be earning less than $125,000 individually or $200,000 as a couple annually
  • Have not owned property in Australia before
  • Have at least 5% of the property cost for the loan deposit

Additionally, if two individuals are buying a property together, they are eligible for the Scheme only if they are a couple. Siblings, friends or any other family are ineligible. Also, both applying individuals need to be Australian citizens and first home buyers.

Get it right from the start with professional help.

Property Cap

There is a price cap on the properties that qualify for the Scheme.

Capital Cities  & Major  Regional Centres
Rest of State
NSW $700,000 $450,000
VIC $600,000 $375,000
QLD $475,000 $400,000
WA $400,000 $300,000
SA $400,000 $250,000
TAS $400,000 $300,000
ACT $500,000
NT $375,000
Jervis Bay Territory and Norfolk Island $450,000
Christmas Island and Cocos (Keeling) Islands $300,000


How to apply?

There is no payout or cash payment offered. The Scheme can only be accessed while applying for a home loan with a lender that is a scheme participant. The federal government does not accept any FHLDS applications directly. The list of participating lenders can be accessed HERE.


  1. The Scheme has just 10,000 places each financial year. Given the fantastic response it is enjoying if you are planning to apply for it, time is of the essence. If you miss the Scheme this financial year, you may have to wait for a turn during the next financial year.
  2. Each lender has a fixed number of scheme places. It’s best to engage a mortgage broker to understand the availability with each lender.
  3. To make the most of Scheme, consider opting for it along with other federal and state government incentives. Again, this would be a lot easier with professional advice. A mortgage broker can guide you on what other schemes and incentives you are likely to be eligible for.

Reach out to us to understand the best way forward for you.