First Home Loan Deposit Scheme
First Home Loan Deposit Scheme

Written by Mark Thomas

17 January, 2020

First Home Loan Deposit Scheme

The Morrison government has pledged $500m to support first-home buyers by lowering the required deposit needed to take out a home loan.

Under the First Home Loan Deposit Scheme (FHLDS), first-time buyers who are struggling to reach the 20 percent deposit requirement by lenders can apply for a home loan with as little as a 5 percent down payment. They will not be subject to lenders’ mortgage insurance since the government will underwrite their home loans and will serve as the guarantor.

Beneficiaries of the scheme will be able to receive support from the program for the life of the loan or until the mortgage is refinanced.

 We found an excellent summary of the scheme provided by CANSTAR that answers many questions.  In summary the link includes:

  • The First Home Loan Deposit Scheme & Lender’s Mortgage Insurance: How it works
  • First Home Loan Deposit Scheme: What it could mean for approved applicants
  • Mythbusting the First Home Loan Deposit Scheme
  • How Australians have responded to the First Home Loan Deposit Scheme
  • Can the FHLDS be combined with other government incentives?
  • Location, location: How much can I spend on a house under the FHLDS?
  • How to check your eligibility for the First Home Loan Deposit Scheme

Click here to view the full CANSTAR review.


Next week:

We will be covering assets that hedge risk – Gold and government bonds and other growth opportunities such as emerging market shares.

For the property investors we will be reviewing the progress of the housing market recovery and its sustainability.  That said, it appears to be climbing a wall of worry boosted by the FHLDS.


Please consult your advisor for specific recommendations.  This general advice does not take into account the client’s objectives, financial situation or needs as we do not and cannot provide personal advice.  Any views written about in this article are the views of the author who has no holdings in those companies or investments mentioned in this article.