FAQs

The Australian Government has introduced the First Home Loan Deposit Scheme (the Scheme) to assist eligible first home buyers to purchase a home sooner.

It does this by providing a guarantee to participating lenders that will allow eligible first home buyers to purchase a home with a deposit of as little as 5 per cent without needing to pay for lenders mortgage insurance.

The Australian Government operates the Scheme through the National Housing Finance and Investment Corporation (NHFIC).

Lenders mortgage insurance (LMI) is a one-off payment that a borrower needs to pay to their lending institution (the bank) when they are borrowing more than 80 per cent of a property’s value – or in other words, when the borrower has less than 20 per cent to put down as a home deposit. The LMI payment doesn’t contribute towards the loan or benefit the borrower – it is only to protect the lender.

Through the Scheme, the Australian Government provides a guarantee on an eligible loan provided by a participating lender to an eligible first home buyer.

The guaranteed amount is the difference between the first home buyer’s deposit (of at least 5 per cent) and 20 per cent of the value of the eligible property. It is similar to parental or family guarantees which already exist, but in this case the Australian Government acts as the guarantor.

By providing this guarantee, an eligible first home borrower no longer has to pay lenders’ mortgage insurance.

No, the guarantee is not a cash payment or a deposit for your home loan.

While there are no costs or repayments associated with the Scheme guarantee, you are responsible for meeting all costs and repayments for the home loan associated with the guarantee. You also need to observe the requirements of the Scheme for as long as you’re covered by the guarantee.

There are 10,000 guarantees released to the participating lender panel each financial year (1 July to 30 June). 

If you are unable to get a scheme place with your preferred lender, you are encouraged to contact any of the other lenders on the participating lender panel that may have scheme places available. Your eligibility for the Scheme depends on your personal financial circumstances, property eligibility and the availability of guarantees.

Provided you satisfy the Scheme eligibility criteria and lending requirements of a participating lender, you can reapply for the Scheme if your initial application is unsuccessful.

At this stage, only 10,000 places are available each financial year. Any decision to increase the number of guarantees available will be determined by the Australian Government. NHFIC does not set the number of guarantees.

The guarantee stays in place until the loan is refinanced, you sell your home, move out or until your loan principal balance reduces to below 80 per cent of the value of your property at purchase.

If you move away for an extended period and your home becomes an investment property (i.e. you rent it out to tenants), then your home loan may no longer be guaranteed under the Scheme. If your move is a temporary one and you do not rent out your house (i.e. it remains your home) then your home loan may continue to be guaranteed under the scheme.

Before moving out (or if you believe you may need to move out), you should discuss this with your lender so that you are fully aware of your responsibilities under the Scheme and the policies of your lender. If your home loan is no longer guaranteed under the Scheme, your lender may require you to take certain actions (including paying fees and/or charges or taking out lenders mortgage insurance).

There are a range of eligibility criteria for the Scheme that cover:

• Borrower eligibility (including income, minimum age, citizenship and prior ownership tests)
• Loan eligibility (deposit and owner-occupier requirements)
• Property eligibility

Check the eligibility page on this website, or use our online interactive eligibility tool to better understand if you meet the Scheme criteria.

You can also search by suburb or postcode to find the relevant property price threshold for the area in which you are looking to purchase or build a property.

Participating lenders can also assist you in determining whether you may be eligible for the Scheme.

You can either apply for a Scheme place as an individual (single application) or as part of a borrower couple (couple application).

The Scheme identifies a couple application as two eligible borrowers who are married or in a de facto relationship with each other.

This means home loan arrangements made with family or friends, with more than two borrowers, or any instance where the other borrower is not your spouse or de facto partner, are ineligible for the First Home Loan Deposit Scheme.

The Scheme is only open to current Australian citizens.

The Scheme is not open for permanent residents who are not Australian citizens.

If you are applying under the Scheme as part of a couple, then you will both need to be Australian citizens and both be first home buyers.

You are a de facto if you fall within the meaning of de facto under the law in the State or Territory of Australia where you live. In some States and Territories, you may even register your de facto relationship.

If your de facto relationship has not been registered, your lender may require you to provide certain documents or information to evidence that you are in a de facto relationship. If you have any queries, you should seek independent legal advice and consult with your participating lender.

No. A person can only have one Scheme place under either a single or couple application. 

Before asking your lender to make a reservation application for you, it is important that you have decided how you want to structure your home loan (as either a single or as part of a couple) because this may have an impact on your ability to secure a Scheme place.

For example, if a successful reservation is made for you as a single applicant, then you cannot seek to have another reservation made for you as part of a couple (and vice versa). 

If a successful reservation is made for you as a single applicant, your lender would need to withdraw your single application if you later wished to apply as part of a couple. In this case, a new reservation for a couple application would need to be made and would be dependent on whether a Scheme place was available at the time.

Check with your participating lender to find out how much deposit you need to save. The Scheme allows eligible first home buyers to purchase or build a home with a deposit of as little as 5 per cent without needing to pay for lenders mortgage insurance, however participating lenders may apply their own additional criteria for Scheme-backed loans. This can include a higher percentage deposit based on your financial circumstances.

It is important that the Scheme assists genuine first home buyers. Read more information about the prior ownership test.

If you are applying under the Scheme:

• ‘as a single’, then only you, individually, will need to satisfy the prior property ownership test, or
• ‘as part of a couple’, then you will both need to satisfy the prior property ownership test.

As part of the Scheme application process, you will need to make a statutory declaration that confirms you have not held a freehold interest in real property in Australia; an interest in a lease of land in Australia with a term of 50 years (or more), or a company title interest in land in Australia. This declaration is made under the First Home Buyer Declaration provided to you by your participating lender.

If you are unsure of whether you have held any of the interests listed above you should ask a professional adviser, as there are legal consequences for providing a false statutory declaration.

You can apply for the Scheme through a participating lender. A participating lender is a bank or other lending institution that has been appointed to the participating lender panel to offer guaranteed loans under the Scheme. The full list of participating lenders is available on our website.    

NHFIC doesn’t accept applications directly from first home buyers.

NHFIC doesn’t accept applications or maintain a waiting list for places under the Scheme. You can apply for the Scheme through a participating lender.

The full list of participating lenders is available on our website.

When you apply for a Scheme-backed loan with a participating lender, your lender will assess your eligibility and then request a Scheme place for you with NHFIC. NHFIC will reserve a Scheme place for you for 14 days, during which time you will need to organise a finance pre-approval with your lender.

Yes, you can apply with more than one participating lender; although you may have multiple applications, you will only be offered one place under the Scheme. Before making a reservation, you should carefully consider the eligibility criteria, particularly whether to apply as a single or as part of a couple.

If a participating lender makes a reservation on your behalf and you then decide to apply for a Scheme-backed loan with another lender, NHFIC will be able to see that you have an existing Scheme Place and may be able to link that reservation to your existing Scheme Place. Your application may be linked where your original reservation remains active and the other participating lender has not exceeded the maximum number of reservations it is permitted to have under the Scheme.

If you decide to apply to more than one participating lender, it is important that you:

• understand the time periods within which you must meet certain requirements will commence from the date of your first Scheme Place reservation; and
• use the same reservation details when speaking with each participating lender. If you do not use the same details, a participating lender may not be able to (or there could be delays to) make a linked reservation on your behalf, which may impact on your ability to obtain a Scheme-backed Loan from that participating lender.

Yes. Eligible borrowers may apply for a guaranteed loan through a registered mortgage broker, provided that the broker has a relationship with a participating lender.

Broadly, genuine savings refers to amounts either saved or held over a period of time which your lender considers to be genuine savings. Speak with your lender to find out whether the deposit you have is made up of genuine savings for the purposes of their lending criteria and the Scheme.

You should also confirm with your participating lender whether any cash grants under other Australian Government, state or territory schemes or programs you may receive can be considered as part of genuine savings by that participating lender.

To reserve a place for you under the Scheme, your lender will need certain information from you including:

• Your full name (legal name as it will appear on the title of any property you purchase)
• Your date of birth
• Your Notice of Assessment (NOA) from the Australian Taxation Office for the previous financial year. For Scheme reservations made up to 30 June 2020, the relevant NOA is the 2018-19 income year. However, if you hold that reservation for too long (e.g. more than 90 days), your relevant NOA may end up being the 2019-20 income year. For Scheme reservations made from 1 July 2020 to 30 June 2021, the relevant NOA is the 2019-20 income year. In any event, you should file your tax return as soon as you are able to enable to you to verify your taxable income to a participating lender.

It is recommended that you collect and have this information available when you first contact your lender. Your lender may also request other documents or information from you depending on your circumstances and their processes.

If you’re applying for the Scheme as a couple and one of you earns less than the tax-free threshold and therefore not required to lodge a tax return, then you will need to provide your participating lender with evidence of your income so they can ensure that as a couple you earn less than the taxable income threshold of $200,000. You will also need to declare via the First Home Buyer Declaration form provided to you by your lender that you are not required to submit a tax return as you earn less than the tax-free threshold of $18,200.

In any other circumstances where you don’t have an NOA (for example, you have been working overseas), please contact your participating lender for advice on other documentation they may accept as evidence of your income.

If your Scheme place reservation expires you will be required to reapply for another Scheme place with a participating lender. You will only be able to reapply if there is a Scheme place available at the time your lender submits an application on your behalf.

Your participating lender will tell you if you have been successful in reserving a Scheme place for a guaranteed loan. Processing times vary between different participating lenders, so you will need to check with your lender in the first instance. Generally, however, the time it takes to assess your eligibility for a guarantee aligns with the participating lender’s timeframe for assessing your loan application.

Your home loan cannot be guaranteed under the Scheme unless you are also approved by your lender for an eligible loan on an eligible property or build.

NHFIC is unable to provide advice about the status of your guarantee or associated loan application.

You have 90 days from the date you have been first pre-approved under the Scheme to find a property and enter a contract of sale. Your lender will be able to provide you with details of when you have been first pre-approved under the Scheme so that you know how much time you have to find a property and enter into a contract of sale. 

Generally, if you are not able to find a property prior to the end of the 90 days, then your Scheme place reservation will expire. However, due to the current situation with COVID-19, if you are unable to find a property and enter into a contract of sale prior to the expiry of your pre-approval under the Scheme, you may be eligible for an extension. Contact your participating lender to discuss whether you qualify for an extension.

Upon entering into a contract of sale, it is important that you contact your lender immediately to finalise your financing arrangements. Your lender will notify NHFIC that a contract of sale has been signed, in which case you will then have an additional 30 days to complete all the necessary paperwork to obtain an unconditional finance approval from your lender.

Settlement must occur within 100 days of your guarantee certificate being issued. Check with your participating lender if you have any questions or concerns about the timeframes and requirements for Scheme place reservations.

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No, only participating lenders can offer guaranteed loans under the Scheme.

NHFIC may expand the panel of participating lenders in the future.

Yes. However, participating lenders may apply their own additional criteria for loans offered under the Scheme, such as restrictions on certain properties, suburbs, purchasing property with existing tenancy, or a higher percentage deposit based on your circumstances, etc.

In addition, not all participating lenders will offer the same home loan products. For example, some participating lenders may allow you to buy land before entering into a contract with a builder while others may require you to enter into a building contract before you settle on your land.

Check with your participating lender to see what additional criteria they may have.

All participating lenders have committed not to charge eligible first home buyers higher interest rates than equivalent borrowers outside of the Scheme.

You may be able to move your guaranteed loan between participating lenders provided that in doing so there is no increase to the loan amount or the term of the loan and that it remains an eligible loan as defined in the Scheme rules. Check with your preferred participating lender for more information.

General complaints about your lender should be made to your lender and/ or any relevant complaints authority.

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For a home loan to be eligible under the Scheme, it must be made by a Participating Lender to either a single eligible first home buyer, or to a couple who are both eligible home buyers, for the purchase of an Eligible Property that is to be occupied by the owner. Learn more about eligible loans on our website.

No, the Scheme is only available for the purchase or build of properties in Australia.

This depends on the type of property you are purchasing. See more information about contract and settlement dates for different types of properties.

Yes, the Scheme is available for a range of different property purchases, provided both the borrower and the property intended for purchase satisfy the Scheme eligibility criteria and are approved for a home loan by a participating lender.

Where you are making an ‘off-the-plan’ purchase:

• you must have signed the contract of sale before the settlement date for your home loan, and
• the settlement date for your home loan must occur within 90 days that your home loan becomes guaranteed under the Scheme

You can find out more information about off-the-plan purchases under the Scheme on our website or by contacting a participating lender.

Yes, the Scheme is available for a range of different property purchases, provided both the borrower and the property intended for purchase satisfy the Scheme eligibility criteria and are approved for a home loan by a participating lender.

You can use a guarantee to build your home under:

• a house and land package; or
• a land and separate contract to

Each type has its own set of requirements.

You may be able to obtain a home loan to first purchase land and then to build your first home on that land. If you do so, then your Participating Lender will require you to:

• enter into an eligible building contract within 6 months;
• start building your home within 12 months; and
• finish building your home within 24 months,

of the settlement date of your home loan to buy the land.

If you choose to buy the land before obtaining a loan to finance the building of your home, you will need to ensure that at the time your loan agreement is entered into to finance the building of your home, the purchase price for your land and the cost to build your home does not exceed the price cap that is applicable to your property. If they do exceed the price cap, then your home loan will not be eligible for the Scheme and your Participating Lender may require you to obtain lenders mortgage insurance or provide a higher deposit to continue with your home loan.

 You can read more information on purchasing a land and separate contract to build a home. 

This will depend on the circumstances of your situation.

Generally, if the delay is not due to your own action, or inaction, you may qualify for an extension to the requirements under the Scheme – for example, where the builder has gone insolvent or there is general decline in the construction sector which has made it difficult for you to meet the requirements.  

If you do not qualify for an extension, then your Participating Lender may no longer be able to continue with your Scheme-Backed Loan and may require you to obtain lenders mortgage insurance in order to continue with your home loan.

If you think you may not be able to meet the timeframes and requirements, then you should discuss this with your participating lender as soon as possible. Your participating lender will be able to assist in determining whether you would be eligible for an extension.

No, ‘owner builder’ contracts are not eligible building contracts for the Scheme. Read more information on what is classified as an eligible building contract.

The property price caps for the Scheme are set by the Australian Government. They have been set to ensure the Scheme is available for the purchase of a modest home, or the purchase of land and construction of a modest home, consistent with the Scheme’s objectives.

No. Under the Scheme, you can purchase a residential property anywhere in Australia, as long as the property is within the price cap for that suburb.  

However, each participating lender will have its own lending criteria and this may include restrictions on certain areas on where it is prepared to lend.  

If you are not sure if the property is an eligible property under the Scheme or if it satisfies your participating lender’s lending criteria, then you should discuss this with your participating lender.

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If your Scheme place reservation expires you will be required to reapply for another Scheme place with a participating lender. You will only be able to reapply if there is a Scheme place available at the time your lender submits an application on your behalf.

Yes, you can apply for a guaranteed loan under the Scheme as well as other Commonwealth, State and Territory Government programs including the First Home Super Saver Scheme, HomeBuilder grant or first home owner grants and concessions.

However these other programs apply their own eligibility criteria and conditions. You should make your own enquiries with the relevant government agencies on the terms of these other programs.

The Scheme requires that if you purchase an existing property, you need to move into the property within six months of settlement of your eligible home loan.

If you purchase off-the-plan or build a new home, you need to move into the property within six months of an occupation certificate being issued. You can find out more information about timeframes for off-the-plan purchases under the Scheme on our website or by contacting a participating lender.

You need to continue to live in your property for so long as your home loan has a guarantee under the Scheme.

If you don’t live in your property – including if you move away for an extended period and your home becomes an investment property (i.e. you rent it out to tenants), then your home loan may no longer be guaranteed under the Scheme. If your move is a temporary one and you do not rent out your house (i.e. it remains your home) then your home loan may continue to be guaranteed under the scheme.

Before moving out (or if you believe you may need to move out), you should discuss this with your lender so that you are fully aware of your responsibilities under the Scheme and the policies of your lender. If your home loan is no longer guaranteed under the Scheme, your lender may require you to take certain actions including paying fees and/or charges or taking out lenders mortgage insurance.

You can sell your home at any time even if your loan is guaranteed under the Scheme. The guarantee will cease when the home is sold.

No, the Scheme is only available for first home buyers. The purchase of a second home would mean that you do not meet the eligibility criteria for the Scheme.

Guaranteed home loans under the Scheme are subject to usual lending arrangements by participating lenders and relevant consumer laws.

If you are having, or expect that you will have, difficulty in meeting your repayments, you should contact your participating lender at the earliest opportunity to discuss your situation.

If you’d like to cancel or withdraw from the Scheme, contact your participating lender.

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1. Australian Securities and Investments Commission's MoneySmart website - www.moneysmart.gov.au
2. Australian Bankers' Association's financial difficulty website - https://www.ausbanking.org.au/campaigns/financial-hardship/
3. Financial Counselling Australia - www.financialcounsellingaustralia.org.au

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If you are unable to find a property and enter into a contract sale prior to the expiry of your pre-approval under the Scheme, you may be entitled to an extension for another 90 days.

Contact your Participating Lender for further details on whether you are eligible for an extension. We recommend that you do so at least two weeks prior to the expiry of your pre-approval to allow your participating lender sufficient time to determine whether you are in fact eligible and process your extension request.

To be eligible under the Scheme, first home buyers must be an Australian citizen by the date they enter into their home loan agreement with a Participating Lender.

Your Participating Lender will require you to provide evidence of your citizenship. A letter that your application to become a citizen has been approved is not sufficient. This is because you still need to complete the final step of making a pledge of commitment to Australia before you can become a citizen.

Participating lenders are permitted to offer hardship support for guaranteed loans as they would do under their normal lending practices.

The Scheme does not change the obligations of a participating lender to comply with relevant laws and follow its own policies in relation to any circumstances of hardship.