Government Grants & Schemes

The First Home Loan Deposit Scheme

The Federal Government has introduced The First Home Loan Deposit Scheme. If you’ve saved 5% of the purchase price of your property, the government will guarantee the remaining 15% of the deposit. You still need to borrow 95%, but you can avoid Lenders Mortgage Insurance [LMI]. Your mortgage needs to be an owner-occupied loan with principal-and-interest repayments.

Eligible first home buyers can’t be earning more than $125,000 a year ($200,000 combined for couples). Access to the scheme is limited to 10,000 borrowers.

The value of eligible homes under the scheme varies by state and city/region:

State/Territory
Capital City
Regional Centre*

NSW
$700,000
$450,000

VIC
$600,000
$375,000

QLD
$475,000
$400,000

SA
$400,000
$250,000

WA
$400,000
$300,000

TAS
$400,000
$300,000

ACT
$500,000
$500,000

NT
$375,000
$375,000

*A regional centre is defined as a city with a population above 250,000, such as Newcastle, Wollongong or Geelong.

The scheme starts on 1 January 2020.

This scheme will make low deposit home loans cheaper. The scheme will be administered through the National Housing Finance and Investment Corporation (NHFIC) in partnership with lenders.

5% deposit home loans already exist, but you generally need to pay LMI when borrowing more than 80% of a property’s value. LMI can be expensive. If you bought a $400,000 property with a 5% deposit ($20,000) you’d be looking at a $12,768 LMI premium. The First Home Loan Deposit Scheme removes this cost, so you’re saving money and also time. You can save a 5% deposit in a quarter of the time it would take to save 20%, after all. There is a downside, however. Saving a smaller deposit and borrowing more money means paying more interest over time.

Eligibility:

  • Only Australian citizens are eligible (not permanent residents). You will need to be a first home buyer (if you own an investment property you won't be eligible) earning $125,000 ($200,000 for a couple) a year or less
  • The scheme is limited to 10,000 borrowers
  • The scheme is open to a range of property types, including apartments, townhouses, house and land packages and existing houses. It is not limited to newly-built or off the plan purchases (unlike some first home owner grants)
  • Couples must be married or in a de facto relationship. Friends, siblings and so on cannot qualify for this scheme together
  • To be eligible for the scheme you must be purchasing a property valued at or below the thresholds for your State

New South Wales State Government First Home Buyer Scheme

$10,000 for first home buyers buying a newly constructed (or substantially renovated) home valued at less than $600,000 or buying land, and the combined value of your building and land are less than $750,000. The grant is available for eligible property transactions occurring after 1 January 2016. You cannot qualify for the grant if you are buying an existing home.

Australian Capital Territory First Home Buyer Scheme

The FHOG scheme in the ACT will no longer be available from 1 July 2019. Instead, the FHOG ACT will be replaced with exemptions on stamp duty, which could add up to a lot more than the current $7,000 FHOG. You or your spouse/partner must not have previously received a FHOG in Australia. You must live in the home you buy for at least 12 months within 12 months of settling on the property (this is when the keys are handed to you) or from when the home is fully built. You must be aged 18 years or over and be an Australian citizen or permanent resident. Specific rules apply to having previously owned property. You may not be eligible to claim the FHOG in the ACT if:

  • You owned residential property anywhere in Australia before 1 July 2000, or
  • You owned residential property in Australia between 1 July 2000 and 1 January 2004, and lived there for any period of time, or You owned residential property in Australia after 1 January 2004, which you lived in for six months or more.

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10th June

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