First Home Loan Deposit Scheme

. 3 min read

First Home Loan Deposit Scheme scheduled is due to commence 1 January 2020. While the National Housing Finance and Investment Corporation (NHFIC) is due to announce the full panel of lenders before 20 December 2019, we can confirm that National Australia Bank is the first participant on the initial panel of lenders to offer guarantees under the scheme.

In summary, the scheme is designed to provide a guarantee that will allow eligible first home buyers on low and middle incomes to purchase a home with a deposit of as little as 5 per cent. It will support up to 10,000 loans each financial year and is subject to eligibility criteria in relation to income thresholds and property prices.

We are also aware that the NHFIC’s Investment Mandate permits up to two major lenders to be appointed to the panel and to receive up to 50 per cent of the 10,000 guarantees allocated per financial year. A number of non-major lenders are expected to be appointed to the panel in due course.

Property price thresholds

The following property price thresholds (maximum property purchase price under the Scheme) will apply in capital cities, large regional centres and regional areas:

New South Wales

  • Capital city and regional centres - $700,000
  • Rest of the state - $450,000

Victoria

  • Capital city and regional centres - $600,000
  • Rest of the state - $375,000

Queensland

  • Capital city and regional centres - $475,000
  • Rest of the state - $400,000

Western Australia

  • Capital city and regional centres - $400,000
  • Rest of the state - $300,000

South Australia

  • Capital city and regional centres - $400,000
  • Rest of the state - $250,000

Tasmania

  • Capital city and regional centres - $400,000
  • Rest of the state - $300,000

Australian Capital City

  • Capital city and regional centres - $500,000

Northern Territory

  • Capital city and regional centres - $375,000

The capital city price caps will apply to large regional centres with a population over 250,000 (the Gold Coast, Newcastle and Lake Macquarie, the Sunshine Coast, Illawarra (Wollongong) and Geelong), recognising that dwellings in large regional centres tend to be significantly more expensive than other regional areas.

Who is eligible for the Scheme?

  • Australian citizens who are at least 18 years of age. Permanent residents are not eligible.
  • Singles with a taxable income of up to $125,000 per annum and couples with a taxable income of up to $200,000 per annum. Incomes will be assessed for the financial year preceding the financial year in which the loan is entered into.
  • Couples are only eligible for the scheme if they are
    married or in a de-facto relationship. Other persons buying together, including siblings, parent/child or friends, are not eligible for the Scheme.
  • Applicants must have a deposit of between 5 and 20 per cent of the property’s value.
  • Loans under the Scheme require scheduled repayments of the principal of the loan for the full period of the agreement.
    If the loan relates both to the purchase of vacant land to the construction of a house on the land, the loan may be an eligible loan even if the terms of the loan agreement permit interest-only repayments for a specified period.
  • Applicants must intend to move into and live in the property as their principal place of residence (i.e. they must be owner occupiers).
  • Applicants must be first home buyers who have not previously owned or had an interest in a residential property either separately or jointly with someone else (this includes residential strata and company title properties, regardless of whether it was an investment or owner-occupied property and whether it was ever lived in)

What type of properties can be bought under the First Home Loan Deposit Scheme?

  • An existing house, townhouse or apartment
  • A house and land package
  • Land together with a separate contract to build a home
  • An off-the-plan apartment or townhouse

How to apply for the First Home Loan Deposit Scheme?

Applications for the Scheme are not yet open. Once the Scheme commences, applications will be lodged through participating lenders and their brokers. You will not be able to apply for the National Housing Finance and Investment Corporation (NHFIC) will not accept applications directly.

Borrower questions will be managed through a panel of participating lenders accessible on the NHFIC website - www.nhfic.gov.au/what-we-do/fhlds/

First Home Loan Deposit Scheme resources