What is the First Home Loan Deposit Scheme? The First Home Loan Deposit Scheme began on 1 January 2020. It allows eligible first home buyers to purchase a property with as little as a five per cent deposit and without the need to take out lenders mortgage insurance (LMI). The First Home Loan Deposit Scheme is an initiative from the Australian Government designed to support eligible first home buyers purchase a home sooner. NHFIC provides a guarantee for eligible first home buyers on low and middle incomes so that they can purchase a home with a deposit of as little as 5%.
FHLDS update: 10/2/21
Home loan deposit options. Getting the deposit together for a new home can be challenging. An ANZ Home Loan Coach can help. We’ll talk you through the options and could help you reach your goal faster than you think. You could get a $3,000 cash contribution when you buy your first home with an ANZ home loan. Low Deposit Home Loans. Are you thinking about getting a home loan but a small deposit is holding you back? You may want to consider one of these low deposit home loans. 10% Deposit Home Loan. With just a 10% deposit, you may qualify for a home loan. For the very few ‘no deposit’ home loans that do exist, there are generally very tight criteria to meet to be eligible, including a near-perfect credit record and a very stable work history. The loan is also likely to come with a higher interest rate. However, many lenders offer what could be the next best thing — 5% deposit home loans.
On Wednesday 3 February, the Australian Government announcedaround 1800 First Home Loan Deposit Scheme (FHLDS) places from the 2019-20 financial year would be rolled over into this current financial year.
Home Loan Deposit Calculator Commonwealth
Eligible first home buyers can now apply for one of these First Home Loan Deposit Scheme (FHLDS) placesthrough a participating lenderbefore 30 June 2021.
These Scheme places are part of theFirst Home Loan Deposit Scheme, not theFHLDS (New Homes)– the key difference being that the FHLDS guarantee can be used foreligible new and existing homes. Standard income and prior property ownership tests, and minimum age, citizenship, owner-occupier and deposit requirements still apply.
On 1 July 2021, another 10,000 FHLDS places will be available for the 2021-22 financial year.
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Home Loan Deposit Requirements
The First Home Loan Deposit Scheme (FHLDS) is an Australian Government initiative to support eligible first home buyers to build or purchase a new home sooner. The Scheme is administered by the National Housing Finance and Investment Corporation (NHFIC).
Usually first home buyers with less than a 20 per cent deposit need to pay lenders mortgage insurance. Under the Scheme, eligible first home buyers can purchase or build a new home with a deposit of as little as 5 per cent (lenders criteria apply). This is because NHFIC guarantees to a participating lender up to 15 percent of the value of the property purchased that is financed by an eligible first home buyer’s home loan.
In the 2020-21 Federal Budget, the Australian Government announced an additional 10,000 FHLDS places for the 2020-21 financial year, specifically for eligible first home buyers building or purchasing new homes. These additional places are known as the First Home Loan Deposit Scheme (New Homes) or FHLDS (New Homes).
Home Loan Deposit Calculator
There are currently 27 participating lenders across Australia offering places under the First Home Loan Deposit Scheme.
To find out more information about the First Home Loan Deposit Scheme and the FHLDS (New Homes), please select an option below:
First Home Loan Deposit Scheme
It gives the lender an idea of what you can afford to repay regularly
Regular savings deposited into an account over a period of several months, regular rental payments and investments all work together to give lenders an indication of your ability to maintain your home loan repayments.
Lenders will look at these and your income sources (salary, investments, dividends) to assess how much money they’re willing to lend to you. Use our borrowing power calculator to get a rough estimate of how much you may be able to borrow.
It impacts the interest rate lenders may offer
The deposit you have available when you come to apply for your home loan can have an impact on the interest rate of the loan.
The bigger your deposit, the more negotiating power and choice of lenders you may have. If you have a bigger deposit, you may even be able to secure a discounted interest rate from a lender.
It affects how 'risky' you are as a customer, and whether you need to pay Lenders Mortgage Insurance (LMI)
Lenders use a simple Loan to Value Ratio (LVR) calculation to assess how risky they consider you (as a borrower) to be. The loan to value ratio looks at the amount you wish to borrow in relation to the value of the property you're looking to purchase.
The higher this ratio, the more risk for the lender. Generally, if you have an LVR of over 80% (as in you wish to borrow more than 80% of the property's value) the lender will require you to pay an LMI premium. This insures the lender against any losses that may occur in the event you default on your loan.
There are alternatives to paying LMI, such as have a family member act as a security guarantor for your loan.
You pay less interest over the life of your loan
The less money you borrow, the less you have to pay off in the future. This means over the course of the home loan, you’ll also be paying less interest. You stand to save a lot by having a sizeable home loan deposit.