TECH TALK: First home loan deposit scheme introduced

TECH TALK: First home loan deposit scheme introduced

Key Changes

Legislation has passed that allows eligible first home buyers to purchase a house with as little as a 5% deposit via the First Home Loan Deposit Scheme.
The Government has released consultation papers that provide more detail on how the scheme is intended to operate. The consultation period ends on 4 November 2019.

Key features of the scheme are:

  1. It will commence on 1 January 2020.

  2. The number of loans will be capped at 10,000 pa.

  3. The National Housing Finance and Investment Commission will guarantee the difference between the deposit accumulated (a minimum of 5%) and 20% of the purchase price.

  4. Applicants must be aged 18 years or older, not have held a freehold interest in Australian real property before, be purchasing or building an owner-occupied dwelling and earn a taxable income of up to $125,000 pa (for individuals) or $200,000 pa (for couples combined).

  5. A maximum of two borrowers for each loan, with both applicants required to meet all eligibility criteria (including being legally married or in a de facto relationship).

  6. Regular principal repayments are required (ie the loan cannot be interest only) for the full term of the loan (maximum of 30 years).

  7. Caps will apply to the purchase price to ensure participation is spread fairly across the country (see table below).

  8. The scheme will complement (but not directly interact with) other measures such as the Government’s First Home Super Saver Scheme and First Home Buyer grants, as well as State and Territory based stamp duty concessions.

Property price caps




Capital city and regional centres1


Rest of state
















































  1. The capital city price caps will apply to large regional centres with a population in excess of 250,000, namely the Gold Coast, Newcastle and Lake Macquarie, the Sunshine Coast, Illawarra (Wollongong) and Geelong


If you would like to know more, talk to Michael Sik at FinPeak Advisers on 0404 446 766 or 02 8003 6865.

This article was originally produced by MLC, to view the full article please click here.

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