The First Home Loan Deposit Scheme is a new programme from the federal government that started on January 1, 2020. Each year, up to 10,000 Australians who are eligible to buy their first home can apply for the Scheme.

What the First Home Loan Deposit Scheme can do for you

It helps people who are eligible to buy their first home faster by giving them a loan that is backed by the government as part of their home loan deposit.
It gets rid of the need for home loans to have LMI, which stands for lenders’ mortgage insurance. If a borrower’s down payment on a home loan is less than 20%, most lenders will charge LMI.
LMI costs can be as high as $10,000 or more on a $500,000 home loan, depending on the lender, the size of the down payment, and the amount borrowed. Through the First Home Loan Deposit Scheme, people don’t have to pay this extra cost.

Who can use the First Home Loan Deposit Scheme and how?

You can get a First Home Loan Scheme loan if you meet all of the following requirements:

You’re buying your first home (not an investment property), you’re over 18, you’re an Australian citizen, you’re one of the first 10,000 eligible people to apply each year, you’re part of a married or de facto couple and your combined income is less than $200,000 (or if you’re single and your income is less than $125,000), and you’re buying a home that costs less than a maximum threshold. In Victoria, the highest limit is $600,000 in Melbourne and Geelong and $375,000 in other parts of the state.

The First Home Owner Grant and the First Home Loan Deposit Scheme can be used together.
It’s important to know that you can use the First Home Owner Grant (FHOG) as part of the 5% deposit you need to get into the First Home Loan Deposit Scheme.

If you are a qualified first-time home buyer in Victoria and are buying or building a new home, you can get the FHOG. The FHOG for new homes in Melbourne is $10,000, and it is $20,000 for new homes in rural areas.

How do I apply for the First Home Loan Deposit Scheme?

National Housing Finance and Investment Corporation (NHFIC) is in charge of the First Home Loan Deposit Scheme (NHFIC). But you can’t use the NHFIC to directly apply for the First Home Loan Deposit Scheme. You fill out an application with one of their more than 30 partner lenders.

How can we help?

Choosing a lender for your home loan is likely to be the most important financial choice you ever make. It’s important to know that even a small difference in the features, terms, and conditions of a home loan can have a big effect on your monthly payments over the life of the loan.

At Futurestep Finance, our team of mortgage brokers has a lot of experience and can help you find a good home loan. We’ll take the time to figure out what you need before recommending a lender and home loan.

Contact us right away to find out how the First Home Loan Deposit Scheme can help you buy your first home faster.

Disclaimer: The information in this article is of a general nature and is meant to be helpful. It is not meant to be general or personal financial advice, nor is it meant to suggest a recommendation or opinion about a financial product. It doesn’t take into account what’s going on in your life and may not apply to your situation. Before you do anything, you should think about your own situation and talk to a professional. Copyright laws and other laws that protect intellectual property protect this content. It can’t be changed, copied, or republished without written permission first.