January 09, 2020


First home loan deposit scheme

As of 1 January 2020, the Australian Government launched a new initiative aimed at assisting eligible first home buyers to purchase a property sooner and with less than a 20% deposit saved.

This new initiative is called the First Home Loan Deposit Scheme (FHLDS). Here are the basics.

The Scheme

Under the FHLDS, the Government will provide a guarantee to a participating lender that will allow eligible first home buyers on low and middle incomes to purchase a home with a deposit of as little as 5% and avoid paying lenders mortgage insurance.

The amount that will be guaranteed by the Government is the difference between the buyer’s deposit (where it is less than 20% but at least 5%) and 20% of the property’s value. The guarantee will not be provided in cash and is not a deposit payment.

The FHLDS is applicable to house and land purchases as well as off-the-plan purchases and is open to both singles and couples, provided they are both eligible under the FHLDS.

About the Scheme


A list of criteria needs to be met by first home buyers in order to be eligible for the FHLDS. Some of the criteria include:

A single applicant’s taxable income for the previous financial year must not be higher than $125,000. For a couple, their combined taxable income for the previous year must not be higher than $200,000.

Citizen Requirement:
The FHLDS is only open to current Australian citizens. The FHLDS is not available to permanent residents who are not Australian citizens.

First Home Buyer:
Anyone applying, whether as a single or a couple, must not have previously owned or held a property interest in Australia.

Deposit Requirement:
You must have at least 5%, but less than 20%, of the property’s value, saved as a deposit.

Owner Occupier Requirement:
The FHLDS has been implemented to support buyers looking to purchase their first home to live in and is not for investment properties. You will need to move into the property within 6 months of settlement or the certificate of occupancy for the property being issued.

Property Value:
If you purchase in Merrifield the total value of the property must not exceed more than $600,000.

This is not a full list of eligibility criteria and various tests apply to confirm purchaser eligibility. To check if you are eligible under the FHLDS, please visit the National Housing Finance and Investment Corporation website at the link below.

Eligibility Criteria

This is not financial or legal advice and you should seek your own independent financial and legal advice prior to applying under the FHLDS.

How to apply.

Applications are made, upon instruction, through one of the 27 participating lenders when you apply for a home loan.

The FHLDS is limited to 10,000 loans for the current financial year and 3,000 people have already been registered, so you’ll need to move quickly if you wish to apply!

Contact us today about finding your dream home in Merrifield.

The above information is general information only and does not constitute legal or financial advice in any way. The information has not been prepared by Merrifield Corporation but has been obtained from Government and other sources and Merrifield Corporation does not assume responsibility or warrant any of its accuracies and does not accept any liability for any error, discrepancy, negligence or otherwise. You are encouraged to make your own independent legal, financial, investment, business, tax and any other enquiries regarding your own personal financial position, eligibility for the scheme and any other relevant factors and consult the URL webpages referenced above for up-to-date information prior to making any decisions.