FAQs
Supporting first home buyers
Frequently Asked Questions (FAQs)
This page details some of the frequently asked questions for the Australian Government’s First Home Loan Deposit Scheme (the Scheme). The answers to these questions are provided for general information in relation to the operation of the Scheme only.
It is your responsibility to find out whether or not your particular circumstances make you eligible for the Scheme. If in doubt, it is your responsibility to obtain the information and advice you need from a participating lender or from your own professional adviser.
Section 1. What is the Scheme and how does it work?
Section 2. Am I an eligible first home buyer?
Section 3. How do you reserve a place under the Scheme?
Section 4. Is your lender approved for the scheme?
Section 5. Which home loans and properties are eligible for the Scheme?
Section 1. What is the Scheme & how does it work?
1.1 What is the First Home Loan Deposit Scheme?
The Australian Government has introduced 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 NHFIC.
1.2 What is the “guarantee”?
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 NHFIC acts as the guarantor.
1.3 Do I get a cash payment?
No, the guarantee is not a cash payment or a deposit for your home loan.
1.4 What will the First Home Loan Deposit Scheme cost me?
There are no costs or repayments associated with the Scheme guarantee. However, you are responsible for meeting all costs and repayments for the home loan associated with the guarantee.
There are a total of 27 participating lenders in the Scheme for you to choose from.
1.5 How many places are available?
The Australian Government is making up to 10,000 guarantees available per financial year from 1 January 2020.
1.6 What if I miss out? Can I reapply?
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 are not prevented from reapplying for the Scheme should your initial application be unsuccessful.
1.7 Will the government make more places available if 10,000 isn’t enough?
Any decision to increase the number of guarantees available will be a matter for the Australian Government. NHFIC does not set the number of guarantees.
1.8 How long does the First Home Loan Deposit Scheme guarantee remain in place?
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.
Section 2. Am I an eligible first home buyer?
2.1 Am I eligible for the First Home Loan Deposit Scheme?
There are a range of eligibility criteria for the Scheme that cover:
- Borrower eligibility
- Loan eligibility
- Property eligibility
You can find out more by clicking here and use our online interactive eligibility tool to better understand whether you may be eligible.
NHFIC has also developed a tool to give first home buyers an indication of the relevant property price threshold for the suburb in which you are looking to purchase a property. You can use the property price threshold tool by clicking here.
Participating lenders can also assist you in determining whether you may be eligible for the Scheme. You can see the full list of participating lenders by clicking here.
2.2 Are Australian permanent residents eligible?
No, Australian permanent residents who are not Australian citizens are not eligible for the Scheme.
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.
2.3 I am an eligible first home buyer under the Scheme but my partner is not, am I still able to get the guarantee?
Provided you satisfy the Scheme eligibility criteria and lending requirements of a participating lender as an individual, you may be eligible to receive a guaranteed loan as an individual.
2.4 How do I know if my partner is my de facto partner?
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.
2.5 Will applying as a single and as part of a couple increase my chances of obtaining a place under the Scheme?
No. A person can only have one Scheme place under either a single or joint application.
Prior to asking your lender to make a reservation for you, you need to, among other things, carefully consider whether you will be applying as a single or as part of a married or de facto couple.
If a successful reservation is made for you as a single, 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 and you now would like a Scheme place as part of a couple, then the reservation made for you as a single will need to be withdrawn by your lender and a new reservation application made for you as part of a couple, and your ability to secure a reservation as part of a couple will depend on whether a Scheme place is available at that time.
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 if you later change your mind.
2.6 Have you ever held an interest in property in Australia?
It is important that the Scheme assists genuine first home buyers.
The prior property ownership test for you being an eligible first home buyer for the Scheme is that you have not ever 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.
These tests apply for property interests in all States and Territories of Australia, regardless of whether the property was residential or commercial property, for investment or owner-occupied purposes and whether or not it was ever lived in.
They also apply to you whether or not any of the interests listed above have been held by you on your own or together with someone else – for example, where you held an interest in property with a former spouse or de facto partner.
What this means is that, 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.
If you are unsure of whether or not you have held any of the kinds of interests listed above you should ask a professional adviser.
Section 3. How do you reserve a place under the Scheme?
3.1 How do I apply?
You must apply for the Scheme through a participating lender. A participating lender is a bank or other residential mortgage lending institution that has been appointed by NHFIC to offer guaranteed loans under the Scheme. You can see the full list of participating lenders by clicking here.
3.2 When can I apply?
The Scheme commenced on 1 January 2020 for the participating major bank lenders and on 1 February for the non-major lenders.
3.3 Is there a waiting list for places under the First Home Loan Deposit Scheme?
NHFIC does not maintain a waiting list for places under the Scheme.
NHFIC will not accept applications for the Scheme. You must apply through a participating lender.
You can see the full list of participating lenders by clicking here.
3.4 Can I apply with more than one lender?
Yes, you can make applications with more than one participating lender. Although you may have multiple applications, you will only be given one place under the Scheme. Prior to asking your lender to make a reservation for you, you need to, among other things, carefully consider whether you will be applying as a single or as part of a married or de facto couple (see “2.4 Will applying as a single and as part of a couple increase my chances of obtaining a place under the Scheme?”).
3.5 Can I transfer my reserved Scheme place between participating lenders?
If you have secured a Scheme Place with a participating lender, you cannot transfer that Scheme Place to another participating lender. However, you can apply for a Scheme-backed loan with more than one participating lender. This is because when the new participating lender makes a reservation on your behalf, NHFIC will be able to see that you have an existing Scheme Place and will link that reservation to your existing Scheme Place.
Prior to asking any lender to make a reservation for you, you need to, among other things, carefully consider whether you will be applying as a single or as part of a married or de facto couple (see “2.4 Will applying as a single and as part of a couple increase my chances of obtaining a place 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
- that you 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 and this may impact on your ability to obtain a Scheme-Backed Loan from that participating lender.
3.6 Can I use a broker?
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.
You can view the full list of participating lenders by clicking here.
3.7 The Scheme requires me to have a minimum deposit of 5 per cent made up of genuine savings. What is considered genuine savings?
Broadly, genuine savings refers to amounts either saved or held over a period of time which your lender considers to be genuine savings. Your lender will be able to provide you with further details on whether the deposit you have is made up of genuine savings for the purposes of their lending criteria and the Scheme.
3.8 What do I need to provide my lender to apply?
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 from the Australian Taxation Office for the 2018-19 income year.
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.
3.9 My partner works but I don’t. The ATO doesn’t require me to lodge a tax return, how do I verify my income for my lender?
If you earn less than the tax free threshold and are 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.
3.10 What happens if my Scheme place reservation expires?
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.
3.11 When do I find out if I have a guarantee?
You need to apply for the Scheme with a participating lender or their authorised representative, such as a mortgage broker. Your participating lender will tell you whether or not you have been successful in reserving a place under the Scheme for a guaranteed loan. Processing times may 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.
NHFIC is unable to provide advice about the status of your guarantee or associated loan application.
3.12 How long do I have to find a property?
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. If you are not able to find a property prior to the end of the 90 days, then your Scheme place reservation will expire (see “6.1 What happens if my Scheme place reservation expires?”).
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.
Section 4. Is your lender approved for the scheme?
4.1 My bank isn’t on the list of participating lenders, can I still apply with them for the First Home Loan Deposit Scheme?
No, only participating lenders can offer guaranteed loans under the Scheme.
4.2 Will more banks be able to offer guarantees in the future?
NHFIC may expand the panel of participating lenders in the future.
4.3 Do all participating lenders have the same eligibility criteria for the First Home Loan Deposit Scheme?
Yes. However, participating lenders may have different lending criteria.
4.4 Will I be charged a higher interest rate under the First Home Loan Deposit Scheme?
All participating lenders have committed not to charge eligible first home buyers higher interest rates than equivalent customers outside of the Scheme.
4.5 Can I keep the guarantee if I switch banks?
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.
4.6 What if I have a complaint about my lender?
General complaints about your lender should be made to your lender and/ or any relevant complaints authority.
Section 5. Which home loans and properties are eligible for the Scheme?
5.1 Can I apply for the First Home Loan Deposit Scheme to purchase a property outside of Australia?
No, the Scheme is only available for the purchase of properties in Australia.
5.2 I have already signed a contract to purchase a property, can I still apply?
This depends on the type of property you are purchasing. More information about contract and settlement dates for different types of properties is available by clicking here.
5.3 Can I use the guarantee to make an off-the-plan purchase?
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 by clicking here or by contacting a participating lender.
5.4 Can I use the guarantee to build my own home or purchase a house and land package?
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 as set out below.
House and land packages
A house and land package is where you build a home by entering into a contract of sale to purchase land from the same entity (or entities within the same corporate group) as the entity who you enter into a contract with to build your home.
For a house and land package, prior to the settlement date for your home loan you will need to have entered into:
- a contract of sale for the land; and
- an eligible building contract to build your home on that
These can either be in the same contract or two separate contracts and, in either case, can be dated before 1 January 2020.
Land and separate contract to build a home
A land and separate contract to build a home is where you build a home by entering into a contract of sale to purchase land from an entity who is different to the entity you enter into a contract with to build your home.
For a land and separate contract to build a home, you must have:
- acquired the land under a contract of sale or, in the Australian Capital Territory, a lease instrument on or after the settlement date of your home loan; and
- entered into an eligible building contract to build your home on that land by no later than the settlement date of your home loan.
Each of the contracts must be dated on or after 1 January 2020.
Eligible building contract
To be an eligible building contract under the Scheme, your building contract must:
- be with a licensed or registered builder
- specify a contract sum in respect of the construction of your home; and
- require the builder to (1) commence construction within 26 weeks of the settlement date for your home loan, and (2) complete construction and procure the issuance of an occupancy certificate within 24 months of the settlement date for your home
‘Owner builder’ contracts are not eligible building contracts for the Scheme.
You can find out more information about building your own home under the Scheme by contacting a participating lender.
5.5 Will the property price thresholds change?
The property price thresholds for the Scheme are set by the Australian Government through NHFIC’s Investment Mandate.
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.
5.6 Does the Scheme restrict me from purchasing in particular areas?
No. Under the Scheme, you can purchase a residential property anywhere in Australia so 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 whether:
- the property is an eligible property under the Scheme; or
- satisfies your participating lender’s lending criteria,
then you should discuss this with your participating lender.
Section 6. Scenario Questions
6.1 What happens if my Scheme place reservation expires?
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.
6.2 What if I miss out? Can I reapply?
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 are not prevented from reapplying for the Scheme should your initial application be unsuccessful.
6.3 Can I use the First Home Loan Deposit Scheme in conjunction with a First Home Owners Grant or the First Home Super Saver Scheme?
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 or first home owner grants and concessions.
These other programs apply their own criteria and conditions. You should make your own enquiries on the terms of these other programs.
6.4 What happens if I need to move and rent out my house?
If you don’t live in your property – including if you move out of the property at a later time – your home loan will cease to be guaranteed by the Scheme. In these circumstances, there may be terms and conditions of your home loan that require you to take certain actions – including that you may need to pay fees and charges and/or take out lenders mortgage insurance that would not have otherwise applied if your home loan were participating under the Scheme.
6.5 What happens if my job requires me to move away for a period of time? Will my home loan still be guaranteed under the Scheme?
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 may no longer be 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.
6.6 What happens if I need to sell my home?
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.
6.7 Can I sell my house and buy another one and keep the guarantee?
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.
6.8 Are there any hardship provisions like those available under the First Home Super Saver Scheme?
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.
6.9 What happens if I can’t afford my mortgage repayments?
Guaranteed home loans under the Scheme are subject to usual lending arrangements by participating lenders and relevant consumer laws.
If you require access to hardship provisions you should contact your participating lender at the earliest opportunity to discuss your situation.
Section 7. Financial difficulty
7.1 I am experiencing financial difficulty, where can I get more information?
- Australian Securities and Investments Commission's MoneySmart website - www.moneysmart.gov.au
- Australian Bankers' Association's financial difficulty website - https://www.ausbanking.org.au/campaigns/financial-hardship/
- Financial Counselling Australia - www.financialcounsellingaustralia.org.au
Key information
Find out more about the First Home Loan Deposit Scheme
Questions?
Contact a participating lender if you have questions or would like to apply for a Scheme place.