What is the First Home Loan Deposit Scheme for first homebuyers and am I eligible for this?

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After months of property hunting you have finally found your dream house. So, what’s next on your list? To get your home loan approved? To talk to a bank or a mortgage broker that you trust? Or to complete the necessary legal paperwork to secure your dream property?

The answer is all three.

Buying a house, especially for first-timers, can be a daunting task with so many things to keep on track. In this article, we will talk about the following:

  • First Home Loan Deposit Scheme (FHLDS) in Australia
  • Eligibility for FHLDS’s application
  • General requirements to get home loans
  • Documents needed for verification


Photo by christian koch / Unsplash

First Home Loan Deposit Scheme (FHLDS)

As suggested by its name, the FHLDS is a financial initiative to help eligible first home buyers in Australia to get their first home quicker. This scheme is regulated by the National Housing Finance and Investment Corporation (NHFIC). For the 2021/22 financial year, 10,000 openings are available.

Typically, a lenders mortgage insurance (LMI) applies for first-time buyers who do not meet the 20% deposit threshold. With the FHLDS in place, the NHFIC will guarantee the participating banks and lenders up to 15% of the value of the property purchased that is financed through this scheme. In other words, you can purchase your first home with as low as a 5% deposit (lenders criteria do apply), if you are eligible for this scheme.

So, am I eligible for the FHLDS?

Yes! You are eligible to put in an application, either as an individual or a couple, for the FHLDS if you:

  • Are 18 years old and above
  • Are Australian citizen(s) at the time you commit to the loan
  • Have an individual annual income up to $125,000 (or a combined annual income up to $200,000) from the previous financial year
  • Intend to be the owner-occupiers of the property
  • Are genuine first home buyer(s)
  • Are married or in a de-facto relationship - only applicable for couple applications

More information about the FHLDS can be found on the NHFIC website or on this fact sheet.

Home loan general requirements

These are some of the general requirements institutions look for:

  • Your personal identity
  • Your income, expenses and employment record
  • Your savings record
  • The amount you have saved for a deposit
  • Any debts you currently owe

While applying for a home loan pre-approval - or a conditional approval - is not a must, it is still helpful in showing and strengthening your genuinity in purchasing a property to the seller.

Home loan requirements vary from bank to bank, and from lender to lender. It is essential for you, as a first homebuyer, to collect as much information as possible to make an informed decision.

With a vast amount of players available in the industry, you might want to consider talking to a mortgage broker, who is capable of consolidating financial information for you.

Alternatively, use our home loan repayment calculator to find out your monthly repayment.

Tax advice office documents with "checked" stamp
Photo by Markus Spiske / Unsplash

Required documents for verification

To demonstrate that you satisfy the general requirements above, you will need:

  • 100 points of identification to prove your identity
  • Your recent payslip to prove your income sources - self-employed buyers can submit their individual tax return statement from the previous financial year
  • Your recent utility bills and credit card statements showing your regular expenses; if you are currently renting a property, you will need to provide your formal agreement
  • A credit report or credit score to show your personal assets and liabilities
  • Other documents: Property details of the property you intend to purchase, possible insurance coverage

This is merely a general list for your reference, please consult someone professional or use our home loan documents checklist to help you.

So, what should I do now?

While it is worth celebrating when you have finally secured your dream house, getting there can be a long and exhausting journey if you are all alone by yourself. At Benevolence Financial Group, we believe that home loan applications shouldn’t trouble you. As such, we strive to make that process as smoothly as possible for you, at zero cost.

Make an appointment with us today to start your journey in getting your first house.

Disclaimer: The information provided is general in nature and does not constitute financial advice. Please speak to us for recommendations on your individual circumstance and requirements.

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