The Australian Government has created an initiative designed to support eligible first home buyers get into the property market sooner. It can be a bit confusing to understand so we’ve tried to simplify it and break it down into the important points, focusing on what it is and who is eligible, and tips on things to look for.

What the First Home Loan Deposit Scheme?

The First Home Loan Deposit Scheme (FHLDS) works by having part of the home loan from a participating lender guaranteed by NHFIC*. This aims to enable first home buyers to secure a home with a deposit of as little as 5% (lender’s criteria apply).

The FHLDS became available from 1 January 2020 where 10,000 places were released for the remainder of the financial year. Another 10,000 Scheme places will be available from July 2020.

Major banks – CBA and NAB – were given 5,000 places, all of which are now currently reserved. The remaining 5,000 scheme places for the current financial year are being offered through 25 non-major lenders. Most of these spots are still available.

Even though the scheme places with the major banks are reserved, there is a chance they may become available so first home buyers can continue to engage with the major banks. Also, you can apply through more than one lender to access a competitive loan rate; you will only receive one place.

Take away points:

  • Most of the 5,000 scheme places offered to non-major banks are still available
  • Another 10,000 places will be available from July 2020

Participating lenders can be found through this link


Firstly, you need to decide if you’re applying for the FHLDS as a single (only you named as the borrower) or as a couple (both you and your partner named as borrowers).

Eligibility criteria include these areas:

  • An income test
    • Singles: your taxable income for the financial year 2018-19 must not be more than $125,000
    • Couples: your combined taxable income for the financial year 2018-19 must not be more than $200,000
  • A prior property ownership test
    • It is required to have no previous property ownership including house or land, residential or commercial
    • If you are applying as a couple, neither of you can have previously owned any property
  • Citizenship test
    • You (or both of you) must be an Australian citizen at the time you enter into a home loan
  • A minimum age test
    • Minimum age is 18 years old
  • A deposit requirement
    • Must have at least a 5% deposit, but no more than 20% inclusive
  • An owner-occupier requirement
    • The Scheme does not cover Investment properties
    • You must move into the property within 6 months from the date of settlement, or, if later, the date an occupancy certificate is issued
    • You must continue to live in that property for so long as your home loan has a guarantee under the Scheme. Your participating lender will be able to explain the terms and conditions and repercussions should you move out

Tips to remember

  • The property being purchased must be residential
  • The purchase price must be under the price cap for its location
  • The loan term will be of 30 years or less
  • There are certain conditions surrounding house and land packages, off-the-plan, etc. Please check with your participating lender
  • A mortgage broker can also help reduce the stress and confusion of the FHLDS. Enquire with a broker such as from the Funding Force team to find out more.

Information provided by National Housing Finance and Investment Corporation*.