The First Home Loan Deposit Scheme (FHLDS) is an Australian Government initiative to support eligible first home buyers to purchase a home sooner.
The scheme allows Australians to have the government act as “guarantor” on their loan with a deposit as little as 5 per cent, allowing first home buyers to avoid the costly Lenders Mortgage Insurance (LMI) fee. LMI fees typically come with deposits under 20 per cent and can be thousands of dollars.
The Fast Facts:
- The First Home Loan Deposit Scheme (FHLDS) has been up and running since 1 January 2020.
- Under the scheme, Australians will be able to catch themselves a government-backed home loan with as little as a 5% deposit, and no requirement to pay lenders mortgage insurance (LMI).
- The scheme will see 27 lenders dole out mortgages to first home buyers.
- First home buyers are required to have at least 5% of the value of an eligible property as a deposit, but no more than 20%.
- Since starting the banks have registered 3,000 potential first home buyers under the FHLDS.
- The remaining 7,000 opportunities for the current financial year will be available from 1 February 2020.
- Another 10,000 opportunities will be available from July 2020.
The staged release of scheme opportunities provides first home buyers with the chance to gather the necessary financial information to support their application. It enables a broader choice between the major banks and smaller lenders.
This opportunity could see first home buyer numbers for owner-occupier home loans surge, as Australians previously unable to afford a home get a foot on the property ladder.
For further information, visit www.nhfic.gov.au/what-we-do/fhlds. Or come along to The Brisbane Home Show on Saturday 29 February and get FREE advice from speakers as part of Get First Home Ready.