First home buyers: have you heard about the First Home Loan Deposit Scheme? No, it’s not the First Home Owners Grant!  

As property prices keep hitting new records, it becomes harder for people to buy their first home. Fortunately, the government has announced numerous grants and schemes assisting first home buyers to save for their first property. The First Home Loan Deposit Scheme is one of these. 

What is the First Home Loan Deposit Scheme? 

The First Home Loan Deposit Scheme is designed to support Australians to get into their first home. This scheme allows people to purchase their home with only a 5% deposit and the lender mortgage insurance waived. This will help purchasers have less pressure in preparing a deposit for their purchase. Additionally, this scheme does not affect the existing First Home Owners’ Grant or stamp duty exemptions/concessions – more than one can apply.  

We compare and summarise the key points of the current common grants as follows: 

 First Home Loan Deposit Scheme Homebuyer Fund First Home Owners Grant 
Overview 
  • Banks will lend up to 95% of purchase price 
  • Lender Mortgage Insurance waived 
  • Government grant given to purchaser to contribute up to 25% of the property  

  • Lender Mortgage Insurance waived 
  • Government grant of $10,000 paid to the purchaser   
  • Key Differences  
  • Purchaser can borrow more from bank and still have 100% of property ownership 

  • Less deposit required  

  • Need to apply for loan from selected banks 

  • For buying either a brand new or existing home 
  • Purchaser owns 75% of property, and government owns 25% as per contribution 

  • Need to repay the fund in exchange of 100% property ownership 

  • Less initial deposit required and less loan required 

  • For buying either a brand new or existing home 
  • Purchaser has the grant and owns 100% of property 

  • Only for buying a brand new residential home  
  • We’ve written previously about the First Home Owners Grant and the Homebuyer Fund which shows more information of the other two programs. Click here for more details about the key criteria of applying the First Home Loan Deposit Scheme. 

    How to apply for the scheme? 

    From 1 July 2021, 10,000 places were released for application and further 4,651 available in 2022 to allow more eligible purchasers to apply for the scheme. Only participating lenders offer places in the scheme, find out which lenders are involved in the scheme here

    Wealthsource can help! 

    There are many things to consider when you decided to purchase your first home. If you would like to have a chat with us and see whether you are eligible to the scheme or not, do not hesitate to give us a call to make an appointment, we are more than happy to discuss further with you.