First Home Loan Deposit Scheme

Monday 27 January 20

First Home Loan Deposit Scheme

The high cost of LMI (Lenders Mortgage Insurance) is one of the biggest hindrances that most first home buyers face when they want to make their first real estate purchase. In response to this issue, the Australian Government has introduced the First Home Loan Deposit Scheme to support first home buyers to purchase a home with a deposit as low as 5% without needing to pay for LMI. The scheme will support up to 10,000 guaranteed loans per financial year. Eligible borrowers can use the guarantee in conjunction with other government programs like the First Home Super Saver Scheme or state and territory first home owner grants and stamp duty concessions. 

For a borrower with a 5% deposit, it works a bit like a family guarantor which gives the bank a guarantee for the remaining 15% cash needed to complete a 20% deposit required to avoid paying LMI. This is not a cash payment, or a deposit for a home loan, but a guarantee that will allow the borrower to be exempt from paying LMI. 

What type of property can be purchased?

Eligible properties are residential dwellings such as Houses, townhouses, apartments, house/land packages, land with a contract to build or an off-the-plan apartment or townhouse.

Who is eligible?

  • Australian citizens who are at lease 18 years old (both applicants if you are a couple). Permanent residents are not eligible.
  • Singles with a taxable income of up to $125,000 per annum for the previous financial year and couples with no more than $200,000 per annum for the previous financial year. For all scheme applications made from 1 January to 30 June 2020, the relevant financial year will be 2018-19.
  • Couples are only eligible for the scheme if they are married or de-facto relationship with each other. Other persons buying together, including siblings, parent/child or friends, are not eligible for the scheme.
  • The Scheme is to assist singles and couples (together) who have at least 5% of the value saved for their deposit.
  • Loans under the Scheme require scheduled repayments of the principal and interest of the loan for the full period of the agreement (with limited exceptions for interest-only loans, which mainly relate to construction lending)
  • Applicants must intend to live in the home they are purchasing or building. No investment securities.
  • Applicants must be first home buyers who have not previously owned property in Australia either separately or jointly with someone else (this includes residential strata and company title properties) 
  • In NSW the maximum purchase price is $700,000 for Sydney and Newcastle 

To find out more about eligibility please visit

Are there any places left and how can I apply?

There will be another 7,000 Scheme places for the current financial year that will be available from 1 February 2020 when potential applicants will have a panel of 27 lenders to choose from.

NHFIC is releasing 10,000 First Home Loan Deposit Scheme guarantees this financial year. Another 10,000 places will be available from July 2020.

The staged release of Scheme places provides first home buyers with the opportunity to gather the necessary financial information to support their application and enables a broader choice between the major banks and smaller lenders. Twenty-five smaller lenders join the Scheme’s lending panel on 1 February.

Please fill in our PDF form here and email it to and I will send you a response within 1 business day. 

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Grace Loans and Bethany Massey are Authorised Credit Representatives of BLSSA Pty Ltd, Australian Credit Licence number 391237. Authorised Credit Representative nos. GL: 523940, Bethany: 513202. Content of site may not be fully up to date as lenders are constantly changing their loans and policies. Any advice provided on this website is of a general nature not taking into account your personal objectives and situation. Such matters are important to consider prior to taking any action. Please make an appointment to discuss your specific situation so that appropriate advice may be given with regard to suitable products using current information.