Buying your first home is an exciting time. It’s important to access all of your entitlements so that you can buy your home sooner. One of those is the federal government’s First Home Loan Deposit Scheme.
What is the First Home Loan Deposit Scheme?
Saving for a home deposit can be a big challenge. Most lenders will charge you lenders’ mortgage insurance (LMI) if you can’t raise at least a 20% deposit on the price of the home you want to buy. The cost of LMI varies, but it can add more than $10,000 to the cost of an average-sized home loan.
This First Home Loan Deposit Scheme (FHLDS) was introduced on 1 January to help up to 10,000 eligible first home buyers to avoid the cost of LMI each financial year. Under the Scheme, the government guarantees part of each eligible first home buyer’s deposit so that the lender doesn’t charge them for LMI.
What are the First Home Loan Deposit Scheme eligibility requirements?
To be eligible for the FHLDS, you must meet ALL of these criteria:
- you and/or your partner (married or de facto) are buying your first residential home (and not an investment property to rent out to tenants).
- you and your partner have a combined annual income of less than $200,000 if you’re applying as a couple (or your income is less than $125,000 if you’re applying by yourself).
- you (and/or your partner) are Australian citizens aged over 18.
- you (and/or your partner) can raise at least 5% of the value of your home as a deposit.
- you (and/or your partner) are among the first 10,000 eligible applicants each financial year.
- the value of your home is below threshold values that have been set for your State. In New South Wales, those threshold values are:
- $700,000 in Sydney and the Newcastle, Lake Macquarie and Illawarra regions.
- $450,000 in other parts of New South Wales.
Can I use the First Home Owner Grant with the First Home Loan Deposit Scheme?
If you are buying or building a brand new home, you can use the First Home Owner Grant as part of the 5% deposit that you need to be eligible for the First Home Loan Deposit Scheme, provided that you meet the eligibility requirements. In New South Wales, the First Home Owner Grant is $10,000.
How do you apply for the First Home Loan Deposit Scheme?
The National Housing Finance and Investment Corporation (NHFIC) administers the FHLDS. However, you don’t apply for the Scheme directly through them. Instead, you apply to one of their more than 27 partner lenders.
How we can help
At Wisebuy Investment Group in Newcastle, our experienced and licensed brokers can help you to get your first home loan via the First Home Loan Deposit Scheme.
We also understand the lending criteria of different lenders. That means we can:
- recommend an appropriate lender for your specific situation,
- help you with your loan application so it will be approved.
It’s important to understand that even a small difference in home loan rates can make a BIG difference to your repayments and the amount of interest you’ll pay over the life of your loan.
It’s also important to understand that the Australian lending market is highly competitive and that there is a huge range of lenders and products available. It’s time-consuming and difficult to research the market yourself. We can remove that hassle for you because we do it for a living.
Contact us today for an obligation-free chat! We’ll take the time to understand your individual financial circumstances before providing you with appropriate advice. Our focus will be on:
- helping you access the First Home Loan Deposit Scheme, and
- finding the right loan for your needs from the First Home Loan Deposit Scheme’s panel of lenders.
And best of all, our service is free!