FHLDS: Purchase Your First House

The First Home Loan Deposit Scheme was first introduced on 1st January 2020. The FHLDS is established by the government to support eligible first-home buyers to purchase a new home as soon as possible. If you are planning to buy a property with a small initial deposit then the first home scheme is for you because you can purchase a property with as little as a 5 percent deposit and without the lenders’ mortgage insurance(LMI). The FHLDS has been renamed as First Home Guarantee by the government and this plan will be spread to 35,000 places every year.


You must have a sufficient amount of savings with you if you want to get a loan without LMI. When the Commonwealth government describes the difference between the savings of a first home buyer and the 20% deposit threshold lenders then the buyer gets a loan without LMI. For example, if you have a savings of $50,000 but you want to buy a home worth $6,00,000 then the government will come forward and guarantees the first $50,000 of your loan so that your savings amount will increase up to $1,00,000 which is equal to the 20% of the total property, excludes the government fees like stamp duties.


FHLDS New Home Guarantee


A new home guarantee is just an extension or increment in FHLDS which was launched during the period of the pandemic covid-19. It is similar to FHLDS but there is only one major difference between both and that is new home guarantee applies only to new properties. So buyers can buy their first property or an already built property with as little as a 5 percent deposit without LMI.


Requirements for ‘New Home’


  1. A newly built house can be a “new home” or any kind of townhouse or apartment.
  2. Buyers can buy land of their choice and a separate contract to build a new home.
  3. House and land packages.
  4. Buyers can buy planned or random properties.


If a buyer completes all the needs of an eligible first home buyer then everything is set and the buyer will get the deal for sure.


Criteria for the First Home Loan Deposit Scheme

If you want to know if you are eligible for the scheme then the first requirement is that you should be an Australian citizen and your age should be above 18 years. You must not have any previously owned property in Australia. The eligibility criteria for the new home guarantee are the same as the criteria for FHLDS. There are some extra requirements you need to fulfil when it comes to your salary, home loan, and property too. Don’t worry these requirements are mentioned briefly below:

  • Property Requirements

For the first home guarantee or FHLDS, the required properties were both newly built or old properties but for the new home guarantee, you have to build or buy a new residence, apartment, house, etc. You can’t buy old properties with this scheme.

There is some threshold on the property value which can be purchased by a receiver. This value is dependent on whether you live in a metropolitan or a regional area.

A regional area is an area where the total population is 2,50,000 or above this area includes Gold Coast, New Castle, Sunshine Coast, Lake Macquarie, the Illawarra and Geelong.

  • Buying as a Single or Couple

If you are single or a couple then you are eligible to buy the property with the NHG scheme. It is compulsory that you buy the property with your partner if you are planning to buy with parents, siblings, or any other relative then it won’t work. You can buy the property with whom you are married or in a live-in relationship.

  • Salary Threshold

If you are buying a house with your partner then you both should have a combined taxable income of $2,00,000. If you are buying a house alone then you must have an income of $1,25,000 for the last financial year and it should be mentioned in ATO.

  • How much deposit buyer should have?

The government has set a range of savings which is called ‘demonstrated savings’ and that means you should have at least a 5% deposit to buy a property.

  • Principal and Interest loan

Your loan is a Principal and Interest home loan for the entire guarantee period. If the loan is for both vacant property and building a new house in such cases interest-only loans are eligible while the buyer’s home is under construction.

  • Owners only

You have to purchase the home you are constructing because the scheme is only open to owners or occupiers.



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