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A Complete Guide to First Home Loan Deposit Scheme for First-Time Homebuyers

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Navigating the journey of purchasing your first home can be as daunting as it is exciting. Amidst the sea of paperwork, financial decisions, and the quest for the perfect property investment lies the First Home Loan Deposit Scheme (FHLDS), a beacon of hope for many first-time homebuyers. This comprehensive guide aims to demystify the scheme, providing you with the knowledge and confidence to take that first step towards homeownership. 

Understanding the First Home Loan Deposit Scheme

The FHLDS is an Australian Government initiative to support eligible first-time homebuyers. The scheme allows for a smaller deposit, as little as 5%, without the need for Lenders Mortgage Insurance (LMI). This can translate into significant savings, but what exactly is the First Home Loan Deposit Scheme, and how does it work?

What is the First Home Loan Deposit Scheme? 

The scheme is designed to help first-time buyers enter the property market sooner by underwriting home loans for eligible participants. It's a form of financial support that bridges the gap between the minimum deposit most buyers can save and the 20% typically required by lenders to avoid LMI.

Eligibility Criteria 

To qualify for the FHLDS, you must:

  • Be a first-time homebuyer who has not previously owned or had an interest in a residential property in Australia. 
  • Have a taxable income of up to $125,000 per annum for singles or $200,000 for couples. 
  • Intend to be the owner-occupier of the purchased property. 

The Role of Mortgage Brokers 

Mortgage brokers can be invaluable in guiding you through the home loan process. They can help you understand the intricacies of the FHLDS and work with you to find a suitable lender. Their expertise can simplify the complex landscape of loans, rates, and terms, tailoring a solution that fits your unique financial situation.

Preparing for Your First Home Purchase 

Before diving into the property market, it's crucial to prepare. Here's a checklist to get you started: 

  • Budgeting: Assess your finances and determine how much you can realistically afford to borrow. 
  • Saving: Focus on saving for a deposit, keeping in mind the 5% minimum for the FHLDS. 
  • Credit Score: Check your credit score and take steps to improve it if necessary. 

Interest Rates and Loan Options 

With the FHLDS, you're not restricted to one type of loan or lender. Interest rates and loan options will vary, so it's essential to shop around. Compare the offerings from various lenders, including the loan terms, features, and flexibility, to find the best fit for your financial goals.

Navigating Paperwork and Compliance 

The application process for the FHLDS involves its fair share of paperwork. From proof of income to identification, you'll need to have your documents in order. Ensure you understand the requirements and deadlines to avoid any hiccups in your application.

Case Studies and Success Stories 

Many first-time buyers have successfully navigated the FHLDS to purchase their first home. These stories can provide insights and inspiration, showcasing the scheme's potential to make homeownership accessible.

The First Home Loan Deposit Scheme is a significant stepping stone for first-time buyers. It requires careful consideration and a thorough understanding of the financial commitment involved. By taking advantage of the scheme and leveraging the expertise of mortgage brokers, the dream of owning your first home can become a reality sooner than you might think.

Frequently Asked Questions

What is the First Home Loan Deposit Scheme?

The First Home Loan Deposit Scheme is a government initiative to help first-time homebuyers purchase a home with a lower deposit requirement.

Who is eligible for the First Home Loan Deposit Scheme?

Eligibility criteria typically include being a first-time homebuyer, meeting income caps, and purchasing a property within a specific price range.

How much deposit do I need under the scheme?

The scheme allows first-time homebuyers to purchase a home with as little as a 5% deposit, with the government guaranteeing the rest.

Can I use the scheme in conjunction with other government grants?

Yes, the scheme can often be used in conjunction with other government programs like the First Home Owner Grant.

Is there a deadline for applying to the scheme?

There may be specific intake periods or caps on the number of applicants each year, so it's important to check current deadlines.

What happens if I sell the property purchased under the scheme?

Selling the property may have implications on the benefits received under the scheme, and it's advisable to consult with your lender or financial advisor.

Phone: 1300 855 022


Zippy Financial is an award-winning mortgage brokerage specialising in home loans, property investment, commercial lending, and vehicle & asset finance. Whether you are looking to buy your first home, refinance or build your property investment portfolio, the team at Zippy Financial can help find and secure the right loan for you and your business.

About the Author:   

Louisa Sanghera is an award-winning mortgage broker and Director at Zippy Financial. Louisa founded Zippy Financial with the goal of helping clients grow their wealth through smart property and business financing. Louisa utilises her expert financial knowledge, vision for exceptional customer service and passion for property to help her clients achieve their lifestyle and financial goals. Louisa is an experienced speaker, financial commentator, mortgage broker industry representative and small business advocate.   

Connect with Louisa on Linkedin.   

Louisa Sanghera is a Credit Representative (437236) of Mortgage Specialists Pty Ltd (Australian Credit Licence No. 387025).

Disclaimer:This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. This article is not to be used in place of professional advice, whether business, health or financial. 



Comparison Rate calculated on a secured loan amount of $150,000 for a term of 25 years. WARNING: This Comparison Rate is true only for the example given and may not include all fees and charges. Different terms, fees and other loan amounts might result in a different Comparison Rate. Fees and Charges Apply. Terms and Conditions are available on request.