First Home Loan Deposit Scheme (FHLDS)

If you’re looking to buy your first home, the First Home Loan Deposit Scheme is a new initiative that’s worth considering. If you’re eligible for the FHLDS, it may help you buy a new home sooner and avoid the cost of lenders’ mortgage insurance (LMI).

The cost of LMI varies depending on the lender, the amount borrowed, and the amount of deposit you can provide, but as an example it can cost $10,000 or more for a $500,000 home loan. The good news is that you can save on this cost if you’re eligible for the FHLDS.

 

How does the First Home Loan Deposit Scheme (FHLDS) work?

 

The FHLDS is a government-guaranteed loan for first home buyers who can raise at least a 5% deposit to buy their first home. The loan that the government provides to eligible FHLDS applicants is the difference between their deposit and the 20% deposit that’s typically required by most lenders to avoid LMI.

If you’re buying or building a new home, you might also be eligible for the first home owner grant (FHOG) to help you with the 5% deposit that you need to be eligible for the FHLDS. The FHOG in Western Australia is $10,000.

 

When did the First Home Loan Deposit Scheme (FHLDS) start?

 

The FHLDS started on 1 January 2020. It is open to up to 10,000 eligible first home buyers per year. There are currently 27 participating mortgage lenders offering guarantees under the Scheme, with non-major lenders becoming available from February 1 2020.

 

What type of properties can you buy using the First Home Loan Deposit Scheme (FHLDS)?

 

You can buy both existing and new properties using the FHLDS. If you’re buying a new property, it can be one bought via:

  • a brand new complete home
  • a separate land and home-building contract,
  • an ‘off-the-plan’ arrangement, or
  • a house and land package

 

Who is eligible for the First Home Loan Deposit Scheme (FHLDS)?

 

You’ll be eligible for the FHLDS provided that you meet all of the following criteria. You are:

Single

  • over 18 years of age
  • an Australian citizen
  • a first home buyer
  • are buying a home to be the owner-occupier (in other words, you’re not buying an investment property)
  • one of the first 10,000 eligible people to apply each year
  • earning less than $125,000 annual income in the previous financial year
  • buying a home that is valued below a maximum threshold. In Perth Metropolitan, the maximum threshold is $400,000 and it is $300,000 for Perth Regional.

Couple

  • both are over 18 years of age
  • both are Australian citizens
  • both are first home buyers
  • are buying a home to be the owner-occupier (in other words, you’re not buying an investment property)
  • one of the first 10,000 eligible people to apply each year
  • in a married or de facto relationship earning less than $200,000 annual income in the previous financial year
  • buying a home that is valued below a maximum threshold. In Perth Metropolitan, the maximum threshold is $400,000 and it is $300,000 for Perth Regional.

 

How do I apply for the First Home Loan Deposit Scheme (FHLDS)?

 

The FHLDS is administered by the National Housing Finance and Investment Corporation (NHFIC). However, you don’t apply for it through the NHFIC. Applicants are required to enquire with a participating lender in order to reserve a place in the scheme, which can be with the help of our friends at The Loan Company.

 

How we can help

At Now Living Realty, we have a range of property listings across Perth. We also work with The Loan Company* (a mortgage broking service) to help new home buyers to source their finance.

Contact us today to find out how you can take advantage of the First Home Loan Deposit Scheme and make your first home dream a reality!

 

Enquire Now

 

*Harrisdale Pty Ltd trading as The Loan Company. Australian Credit Licence Number 386355