first home loan deposit scheme

What is the first home loan deposit scheme?

For many people, starting the process of becoming a homeowner is both an exciting and frequently intimidating proposition. Various initiatives have been established by governments worldwide to aid first-time homebuyers in realizing this desire.

The First Home Loan Deposit Scheme is one such scheme that aims to empower prospective homeowners by easing the financial burden of a home loan deposit. We will examine the scheme’s complexities in this extensive guide, revealing its advantages, workings, and detailed procedure for obtaining your first house through this ground-breaking program.

first home loan deposit scheme

Understanding the First Home Loan Deposit Scheme

A government-backed scheme, known as the First Home Loan Deposit Scheme or the First Home Guarantee, plays a pivotal role in assisting first-time homebuyers through the challenge of saving a sizable down payment. Historically, before obtaining a mortgage, potential homeowners have had to set aside a significant portion of the property’s value as a deposit. 

However, the First Home Loan Deposit Scheme also referred to as the First Home Buyers Deposit Scheme, intervenes to lessen this financial strain, enabling qualified people to buy a home with a reduced down payment. This initiative aims to make homeownership more accessible and achievable for individuals who may face difficulties in accumulating a traditional deposit amount.

How Does the First Home Loan Deposit Scheme Work?

Under the terms of the program, qualified first-time buyers can buy a house with as little as a 5% down payment, with the government guaranteeing the remaining deposit. This guarantor function lowers the risk for lenders, which increases the viability of house loans for people with low savings.

What are the benefits of the scheme? 

The First Home Loan Deposit Scheme’s main benefit is its capacity to increase accessibility to homeownership. The program, including the recently updated First Home Loan Deposit Scheme 2024, offers opportunities to people who might have found it difficult to save the required deposit amount because it requires a smaller commitment. The plan may also remove the requirement for pricey lenders mortgage insurance (LMI), which would further lessen the financial load on first-time purchasers. 

The introduction of the First Home Loan Deposit Scheme 2024 underscores the government’s commitment to continually enhancing initiatives that support aspiring homeowners on their path to realizing the dream of owning their first home.

Determining Your Borrowing Capacity

The first step in the application procedure is to determine your borrowing capability. Knowing your income, expenses, credit history, and financial status will be essential in figuring out how much loan you can afford. This is a critical step in making sure you have a strong financial foundation and reasonable expectations before you enter the real estate market.

How Much Can You Borrow with the First Home Loan Deposit Scheme? 

Your income, your costs, the location and value of the house, and other criteria will all affect how much you can borrow under the First Home Loan Deposit Scheme. First home loan deposit scheme eligibility is determined by various factors, and lenders will evaluate your ability to repay the loan while accounting for the program’s lowered deposit requirement. 

It’s crucial to thoroughly understand and meet the eligibility criteria, which typically include being a first-time homebuyer, an Australian citizen, and meeting specified income thresholds. By ensuring that you fulfill these requirements, you enhance your chances of successfully accessing the benefits of the First Home Loan Deposit Scheme and taking a significant step towards homeownership.

Example of How the First Home Guarantee Works?

To demonstrate how the First Home Loan Deposit Scheme works in reality, let’s have a look at an example. Let’s say you find a $500,000 property and qualify for the program. Should a 5% deposit be required, $25,000 would be needed. You can obtain a home loan without having to provide a full 20% deposit because the government will guarantee the remaining 15%.

How to Apply for the First Home Loan Deposit Scheme? 

The First Home Loan Deposit Scheme application process is systematic. Make sure you first meet the qualifying requirements, which usually include being an Australian citizen, a first-time buyer, and reaching certain income limitations. After verification, get in touch with mortgage brokers or participating lenders who can help you with the application process. They can also assist you in gathering the required paperwork and submitting your application to the National Housing Finance and Investment Corporation (NHFIC).

first home deposit scheme

How to Choose Loan Products and Lenders

Choosing the appropriate lenders and loan products is an important part of the home-buying process. To compare different loan possibilities, interest rates, and payback conditions, work closely with mortgage brokers who can provide valuable insights. Take into account elements like loan characteristics, variable or fixed interest rates, and any additional expenses. 

It’s essential to consider your specific needs and financial goals. If you’re exploring investment property loans, ensure that the lenders you consult have experience and expertise in handling such financing to make informed decisions aligned with your investment objectives.

A seamless and fruitful house-buying process depends on selecting a reliable lender, especially those experienced in FHLDS lenders, with the First Home Loan Deposit Scheme application handling experience. Engaging with lenders well-versed in the intricacies of the FHLDS can streamline the application process, ensuring a smoother journey toward achieving your dream of homeownership.


In conclusion, the First Home Loan Deposit Scheme offers first-time homebuyers a realistic route to homeownership and serves as a light of hope. You can handle the process with confidence if you comprehend the nuances of the program, ascertain your borrowing ability, and choose loan products and lenders wisely. This program is a great opportunity for those who want to become homeowners to realize their goals and start a new chapter of success in their personal and financial lives.


1. How much deposit for a home loan?

The deposit required for a home loan typically ranges from 5% to 20% of the property’s purchase price. However, with government-backed initiatives like the First Home Loan Deposit Scheme, eligible first-time buyers may secure a home loan with a deposit as low as 5%, making homeownership more accessible. The specific deposit amount depends on factors such as the lender’s requirements, the loan type, and the borrower’s financial situation.

2. How to apply for a first home guarantee?

To apply for a First Home Loan Deposit Scheme (FHLDS) guarantee, check your eligibility first. If eligible, approach participating lenders or mortgage brokers who can guide you through the application process. Gather the necessary documents and submit your application to the National Housing Finance and Investment Corporation (NHFIC).

3. Can I use the First Home Loan Deposit Scheme for an investment property?

No, the scheme is exclusively designed to assist first-time homebuyers in securing their primary residence. It cannot be used for investment properties.

4. Can you use the first home buyers grant as a deposit?

Yes, in some cases, the First Home Buyers Grant can be used as part of your deposit. However, it’s important to note that the grant may not cover the entire deposit amount. Additional savings or assistance, such as the First Home Loan Deposit Scheme, may be needed to meet the lender’s requirements. Check with your lender or mortgage broker for specific details based on your circumstances.

5. What happens if I am unable to repay my home loan under the scheme?

If you face financial difficulties, it is crucial to communicate with your lender promptly. The scheme’s guarantor arrangement does not absolve you of your repayment responsibilities, and lenders will work with you to find a suitable solution.

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