The First Home Loan Deposit Scheme (FHLDS) has been intended to benefit for first home buyers. How this scheme work? What are the requirements to meet to qualify? And, if you are eligible, how to apply? What you should know about it?
What is the First Home Loan Deposit Scheme?
First Home Loan Deposit Scheme started on 1st Jan 2020. It permits first home buyers to buy a property with as meager as a 5% deposit only and without the need to take out banks lender mortgage insurance (LMI). Australian government says this could save first home buyers as much as $10,000 to $20,000.
The First Home Loan Deposit Scheme is started by Australian government to help citizens get into their first home ASAP. A further new 10,000 applicant extended on 6 oct 2020 as part of new federal budget as previous quota get filled and was successful making citizens.
For example, if you have $50,000 to put towards a $500,000 home, the government would move in and guarantee the first $60,000 of your loan so that it gives your security up to $100,000, or 20% of the total value of your property, apart from government fees like stamp duty. In this sense, the First Home Loan Deposit Scheme has a related effect to a Family Guarantee but with the government being the role of backer over the loan instead of a family member.
Buyers is in Victoria get additional $10,000 as first home buyers grant and for regional Victoria $25000 and stamp during saving up to 750 K plus builders grant of $25000 which is only for limited time Dec 2020 if builder contract signup.
To apply to the Scheme, there are some following eligibility criteria. You need to be able to provide documents of your eligibility to secure your position.
Eligibility criteria includes:
- All claimants must be First Home Buyers and must not have claimed or had an interest in residential property (regardless of whether as a venture or owner occupied).
- Individual must have earned less than $125,000 or $200,000 for partners or couples in the previous financial year.
- Couples must be marital or in a de facto relationship. Other individuals buying together, including friends, siblings are not qualified.
- Age must be 18 years or older. (ID is required)
- All applicants must be Australian citizens. This scheme is not valid for Permanent residents.
- All Applicants must have to Genuine 5% of deposit of the total property’s value. if you have more than 20% deposit, it wont be covered under this scheme.
Property Price Caps criteria:
Also First home Loan Deposit Scheme also have price cap criteria for Capital cities and Regional areas. Check out Vic and NSW capital cities and regional area.
| Number | Region/State | Price Cap (AUD) |
| 1 | VIC – capital city | $600,000 |
| 2 | VIC – regional centre (Geelong) |
$600,000 |
| 3 |
VIC – other |
$375000 |
| 4 |
NSW – other |
$450,000 |
| 5 |
NSW – capital city |
$700,000 |
| 6 |
NSW – regional centre (Newcastle and Lake Macquarie) |
$700,000 |
| 7 |
NSW – regional centre (Illawarra) |
$700,000 |
How to apply for First Home Loan Deposit Scheme?
Ready to kick start and buy your first dream home? Yes, This can help you to buy your First home home quicker than you have realise. Contact Home loan specialist who can help you prepare for application, documents required and lodge application on your behalf and keep you upto on whole process. 7Mortgage broker will help first home buyers to buy their first dream home.
As part of the 2020-21 Federal Financial Budget, Government has committed an extra 10,000 First Home Loan Deposit Scheme (FHLDS) application for the 2020-21 financial year, particularly for eligible first home buyers purchasing new dream homes. By the way, Home need to be purchase within 90 days of approval of FHLDS scheme.