The First Home Loan Deposit Scheme is an initiative from the Australian Government designed to support eligible first home buyers purchase a home sooner.
NHFIC provides a guarantee for eligible first home buyers on low and middle incomes so that they can purchase a home with a deposit of as little as 5%.
The Scheme supports up to 10,000 home loans each financial year through a panel of participating lenders.
Generally if you want to buy a property in Australia you will need a deposit of at least 20 per cent to avoid paying Lenders Mortgage Insurance. The Loan to Valuation Ratio needs to be below 80 per cent to avoid paying LMI. The Loan to Valuation Ratio (LVR) takes into the account the purchase price of the property including stamp duty and legal costs less the deposit been placed on the property.
Under the First Home Loan Deposit Scheme, you’re required to contribute a minimum deposit of 5 per cent and the NHFIC (The National Housing and Finance Investment Corporation) contribute up to 15 per cent of the property’s value.
Australian citizens who are at least 18 years of age. Permanent residents are not eligible.
As part of the 2021-2022 Federal Government Budget, The Australian Government has announced the Family Home Guarantee, specifically designed to support eligible single parents purchase their first home or re-enter the property market with a deposit of at least 2 per cent.
Beginning in the 2021-2022 financial year there will be 10,000 places available through a panel of participating lenders.