Vicky McLoughlin No Comments

On January 1st 2020, the government rolled out their First Home Loan Deposit Scheme (FHLDS). This scheme is designed to help millennials buy a home sooner by removing the extra cost of Lender’s Mortgage Insurance (LMI).

Ten thousand borrowers will be eligible for the scheme this financial year with 3,000 spaces having already been taken. Another 10,000 spaces will become available from July 2020.

How does it work?

The FHLDS aims to allow first home buyers to purchase a property with a 5% deposit, the government will guarantee the remaining 15%, bringing the total to 20%. This is generally the amount lenders require as a deposit on a property.

What is LMI?

Usually, if you have less than 20% deposit for a property, you will have to pay Lenders Mortgage Insurance (LMI). This is designed to cover the lender if you can’t repay your mortgage. LMI can cost between $8,000 to $15,000 on top of your loan, depending on the size of your mortgage. With the FHLDS, the government covers the LMI, saving you a significant amount of money! If you’re accepted into the scheme you also receive support from the government throughout the loan. It’s important to note though, if you make the decision to refinance, the support goes.


Please find the eligibility criteria below:

  • You should be earning up to $125,000 or $200,00 as a couple (spouse or de facto)
  • You must have never owned a property in Australia before
  • You must be an Australian citizen
  • You should be 18 years or over
  • You must have at least 5% of the value of an eligible property as deposit
  • You must be an owner occupier.

For more information about eligibility requirements please head to the government website:

Which properties are eligible?

Please find the property requirements below, if you are unsure about anything please don’t hesitate to ask a member of the Seek team.

  • It must be a residential property 
  • It must have a purchase price under the cap for its location – please see the table below 
  • It must be purchased by an eligible first home buyer under the scheme
  • At the settlement date, you must be the sole registered owner(s) of the property
  • It must be a property which is (1) an established dwelling, or (2) a new-build dwelling that is purchased under a house and land package, a land and separate contract to build a home or an ‘off-the-plan’ arrangement that is financed under an Eligible Loan from a participating lender.

Property price cap for each location:

If you are unsure which location your property falls into, simply enter the postcode or suburb of the property to display the relevant property price threshold:

What is the Process?

  1. Apply for the First Home Buyer Loan Deposit Scheme through the National Housing Finance and Investment Corporation (NHFIC). 
  2. Once approved, you can take out a loan
  3. The government will be your guarantor
  4. Your lender will do the usual checks, but the process should be easier without having a 20% deposit.
  5. For more information, here is a link to the FHLDS:


If you are a first home buyer and don’t quite have the 20% deposit saved up, this scheme is a great way to get you on the property ladder sooner. The Seek Financial team are always up to date on all the latest schemes and grants available and have access to a wide panel of approved lenders so please don’t hesitate to reach out to one of our friendly brokers today. We’re here to help.





The above information is general in nature. It has been prepared without taking into account your objectives, financial situation or needs.

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