What is the First Home Loan Deposit Scheme?

Article by Shantelle Santos

Having twenty per cent deposit for the purchase of a property is a big financial outlay. One which, for many first home buyers, has been all but impossible as property prices have continued to grow more quickly than wages. Consequently many are entering the property market at a much later age or not at all.

While it is not essential to have a twenty per cent deposit to get a home loan, not having one certainly has a downside.  Taking out a home loan with just five or ten per cent deposit means first-time homebuyers must take out mortgage insurance. As a consequence, they have to borrow more money. Banks see these loans as higher risk and are usually less flexible with repayments and interest rates offered, among other things. As such, having a minimum of twenty per cent deposit is certainly the ideal scenario.

On the first of January 2020, the Federal Government introduced the First Home Loan Deposit Scheme (FHLDS for short). The scheme is aimed at giving 10,000 first time buyers the opportunity to purchase their first properties with as little as five per cent deposit, with the help of participating lenders. 

If you are thinking of purchasing your very first property but are struggling to save for the elusive twenty per cent deposit read on. We’ve written this article to explain a little more about what the scheme is and who is eligible to apply.


What is a First Home Loan Deposit Scheme?

Introduced earlier this year, the First Home Loan Deposit Scheme is a programme designed to assist First Home Buyers in entering the property market by allowing them to buy a property with a deposit as little as five per cent. The Government guarantees the remaining fifteen per cent, negating the need to take out lenders mortgage insurance, saving eligible first home buyers thousands upfront and in future interest. 


How can first home buyers see if they’re eligible?

Here is a list of the many different requirements that could deem individuals eligible for the First Home Loan Deposit Scheme.

  • Must be an Australian Citizen 18 or over

  • If buying as a couple, you need to be spouses or partners

  • You must never have previously owned property in Australia

  • Buyers need to at least have the amount to cover a 5% deposit

  • If purchasing by yourself, you need to have earned at least $125,000 in the last financial year

  • If purchasing as a couple, you need to have earned a combined taxable income of less than $200,000 in the last financial year

  • And, you will need to be living in the home you are about to buy (owner-occupiers)

  • There are also property price thresholds that differ depending on where you live. Check the FHLDS property price thresholds applicable to each state on the National Housing Finance and Investment Corporation’s website.


How to apply?

With 10,000 loans available from January 1st and another 10,000 becoming available by July 1st, Australians can apply for this scheme through their banks and other branches. Here’s a list of a few of the lenders you can acquire the First Home Loan Deposit Scheme from:


Major Lenders

Non-Major Lenders

National Australia Bank (NAB)

Australian Military Bank

Commonwealth Bank of Australia (CBA)

Auswide Bank    


Bank Australia 


Bank First


Bank of us    


Bendigo Bank 


Beyond Bank Australia 


Community First Credit Union




Defence Bank 


Gateway Bank    


G&C Mutual Bank


Indigenous Business Australia 




MyState Bank


People’s Choice Credit Union     


Police Bank (including the Border Bank and Bank of Heritage Isle)    


P&N Bank




Queensland Country Credit Union    


Regional Australia Bank


Sydney Mutual Bank and Endeavour Mutual Bank (divisions of Australian Mutual Bank Ltd)


Teachers Mutual Bank Limited (including Firefighters Mutual Bank, Health Professionals Bank, Teachers Mutual Bank and UniBank)    


The Mutual Bank


WAW Credit Union 

(please note this list was current and accurate as of June 1, 2020)


Applicants will need to provide documents the following documentation as part of the application process:

  • Medicare ID

  • Australian Passport or Citizenship

  • Notice of Assessment of the last financial year from the ATO

  • Proof of savings

  • The contract of the property you are looking to purchase

Make sure you have this documentation up to date and on hand to ensure efficient processing of your application. Reservations of the 10,000 places are given on a first come first serve basis.

As always, the scheme has been put in place merely as a launching pad to get struggling first home buyers into homeownership. As with any large financial commitment, make sure you’ve done your due diligence. Understand all the upfront costs of purchasing a property, such as Stamp Duty, solicitors fees and the like. Make sure you are not overextending with the amount you are wanting to borrow and can comfortably service repayments now and should anything change in future. Ensuring these items will ultimately put you in good stead for gaining approval for a spot in this scheme and make sure you don’t suffer mortgage stress in future.

If you have any questions or would like to learn more about the First Home Loan Deposit Scheme and purchasing your first property, then don’t hesitate to get in touch with our team on 1300 123 463.

Published on 1st of January 2022 by Anthony Lamb
Anthony Lamb
Anthony Lamb


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