Are you eligible for the First Home Loan Deposit Scheme?
Find out how you can apply for a home loan with a 5 per cent deposit, and pay no Lender's Mortgage Insurance.
Smart Booster Home Loan Discounted Variable - 1yr
special1.99% variable rate for 12 months then 2.48% variable rate
Interest rates ranked in the best 20%
No ongoing fees
based on $300,000 loan amount for 25 years at 1.99%
Borrow up to 94.9999%
Go to site
Borrow up to 94.9999%
Go to site
Borrow up to 95%
Go to site
Borrow up to 95%
Go to site
Borrow up to 95%
Go to site
Learn more about home loans
Learn with our guides
Find home loans from a wide range of Australian lenders that best suit your needs.
Home loans repayments
Calculate how much your loan repayments could be.
Talk to an expert
For discounts and special rates, speak to a broker today.
Latest news and articles
What is the First Home Loan Deposit Scheme?
The First Home Loan Deposit Scheme (FHLDS) is a program from the federal government’s National Housing Finance and Investment Corporation (NHFIC). The government initiative is designed to support Australian first home buyers by allowing them to purchase property with a deposit of just 5 per cent, and without having to pay for Lender’s Mortgage Insurance (LMI).
How can the First Home Loan Deposit Scheme benefit you?
The government's First Home Loan Deposit Scheme can help Australian first home buyers to join the property market by helping to minimise the up-front costs of their first home loan.
For many first home buyers, saving a 20 per cent deposit is often difficult, especially considering property prices in some Australian capitals. Saving a 10 or 5 per cent deposit may be easier, but the smaller your deposit, the more you may need to pay in Lender’s Mortgage Insurance (LMI).
Under the First Home Loan Deposit Scheme, eligible borrowers can buy their first home by only paying a five per cent deposit on their property when they take out a mortgage from a participating lender. Because the Australian government will guarantee up to 15 per cent of the property value, the borrowers won’t need to worry about LMI charges. Effectively, the Australian government will be your guarantor!
What are the eligibility criteria of the First Home Loan Deposit Scheme?
The precise eligibility criteria for the FHLDS may vary depending on your location and status, but some of the basics include:
- You'll need to be an Australian citizen over 18 years of age who has not bought property before.
- You'll need to be buying residential property as an owner occupier for the first time.
- Your taxable income must be under a maximum of $125,000 per annum (a combined $200,000 for couples) according to your ATO Notice of Assessment.
- You’ll need to apply for a mortgage from one of a limited number of participating lenders in Australia, so you may not always be able to select the home loan or interest rate of your choice.
- Only a limited numbers of scheme places are available in the FHLDS – 10,000 each financial year – so you may need to act fast to be considered for the scheme.
- The FHLDS can be used to purchase a new home or an established property, provided the property's value is under the maximum purchase price cap for the area. This includes vacant land, house and land packages, as well as units bought off the plan. Property price caps may vary by postcode, with different price caps for capital cities and regional centres.
For more information on what is and isn't covered by the FHLDS, you can visit the NHFIC website for a fact sheet.
First Home Loan Deposit Scheme property price caps by state
To be eligible for the FHLDS, whether you're purchasing a new home or an existing property, your purchase will need to fall under the maximum price threshold for its area:
Price Cap ($AUD)
FHLDS (New Homes) only
Price Cap ($AUD)
|NSW - capital city||$700,000||$950,000|
|NSW - regional centre (Newcastle and Lake Macquarie)||$700,000||$950,000|
|NSW – regional centre (Illawarra)||$700,000||$950,000|
|NSW – other||$450,000||$600,000|
|VIC – capital city||$600,000||$850,000|
|VIC – regional centre (Geelong)||$600,000||$850,000|
|VIC – other||$375,000||$550,000|
|QLD – capital city||$475,000||$650,000|
|QLD – regional centre (Gold Coast)||$475,000||$650,000|
|QLD – regional centre (Sunshine Coast)||$475,000||$650,000|
|QLD – other||$400,000||$500,000|
|WA – capital city||$400,000||$550,000|
|WA – other||$300,000||$400,000|
|SA – capital city||$400,000||$550,000|
|SA – other||$250,000||$400,000|
|TAS – capital city||$400,000||$550,000|
|TAS – other||$300,000||$400,000|
|Jervis Bay Territory & Norfolk Island||$450,000||$600,000|
|Christmas Island & Cocos (Keeling) Island||$300,000||$400,000|
According to the NHFIC:
"The capital city price caps 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."
What are the steps to apply for the First Home Loan Deposit Scheme?
- Check if you’re eligible: You can use the NHFIC eligibility tool to find out if you fulfil the eligibility criteria to apply for a place in the scheme.
- Check your finances: Have you saved up a 5 per cent deposit for a property that also fulfils the scheme’s eligibility requirements? And is your income sufficient to afford the repayments on a mortgage from a participating lender?
- Compare participating lenders: At time of writing, there are 27 lenders participating in the FHLDS. Compare mortgage options to work out which home loan may best suit your needs.
- Contact your selected lender: You can apply for a home loan through the FHLDS by contacting a participating lender directly. RateCity and NHFIC can’t accept applications directly.
- Complete the lender’s application process: You’ll need to fulfil the lender's lending criteria when you enquire about a home loan, and provide the necessary documentation, including proof of income, proof of identity and proof of residence.
Can the First Home Loan Deposit Scheme be used with other grants?
Depending on your personal financial situation, you may be able to use the FHLDS in conjunction with other grants, concessions and incentives, available from the federal and state/territory governments, as well as from individual mortgage lenders.
- First Home Owner Grants (FHOGs): These programs from the state and territory governments may allow eligible first home buyers to claim thousands of dollars to go towards their first home loan deposit.
- Stamp duty concessions: Some state and territory governments may discount or waive the cost of stamp duty for first home buyers, depending on the property they’re buying.
- First Home Super Saver Scheme (FHSS): This scheme from the Australian Taxation Office (ATO) allows you to make extra contributions into your super fund, and withdraw up to $10,000 ($20,000 for couples) of these contributions to go towards your home deposit. By securely saving your money in your super fund, you make it almost impossible to spend this money on anything other than its intended purpose.
- Cashback deals: Some mortgage lenders offer cashback rewards and incentives to encourage new borrowers to sign up with them. This money can prove useful for balancing your budget, especially in the first few months of a mortgage.
Senior Financial Writer
Mark Bristow is a senior financial writer for RateCity and an experienced analyst, researcher, and producer. Working for over ten years, Mark previously wrote and researched commercial real estate at CoreLogic, and has seen articles published at Lifehacker and Business Insider, among others. Most recently, Mark has joined RateCity working across finance as a whole. Whatever the topic, Mark’s goal is always to provide simple solutions to complex problems.
Today's top home loans
Frequently asked questions
Can I get a NAB first home loan?
The First Home Loan Deposit Scheme of NAB helps first home buyers purchase a property sooner by reducing the upfront costs required. This scheme is offered based on a Government-backed initiative, with10,000 available places announced in October 2020.
Suppose your application for the NAB first home buyer loan is successful. In that case, you’ll only need to pay a low deposit, between 5 and 20 per cent of the property value and won’t be asked to pay lender's mortgage insurance (LMI). You’ll also receive a limited guarantee from the Australian government to purchase the property.
If you’re applying for the NAB first home buyer home loan as an individual, you need to have earned less than $125,000 in the last financial year. Couples applying for the NAB first home loan need to have earned less than $200,000 to be eligible. To be considered a couple, you need to be married or in a de facto relationship. A parent and child, siblings or friends are not considered a couple when applying for a NAB first home loan.
The NAB First Home Loan Deposit Scheme is currently offered only to purchase a brand new property, rather than an established property.
How can I apply for a first home buyers loan with Commonwealth Bank?
Getting a home loan requires planning and research. If you are considering a home loan with the Commonwealth Bank, you can find the information you need in the buying your first home section of the bank’s website.
You can see the steps you should take before applying for the loan and use the calculators to work out how much you can borrow, what your monthly repayments would be and the upfront costs you’d likely pay.
You can also book a time with a Commonwealth first home loan specialist by calling 13 2221.
CommBank publishes a property report that may help you understand the real estate market. The bank has also created a CommBank Property App that you can use to search for property. The link to download this app is available on the same webpage.
If you are eligible for the First Home Loan Deposit Scheme, CommBank will help you process your application. The scheme helps first home buyers to purchase a home with a low deposit. You can read details about this scheme here and speak with a CommBank home lending specialist to understand your options.
Can first home buyers apply for an ING home loan?
First home buyers can apply for an ING home loan, but first, they need to select the most suitable home loan product and calculate the initial deposit on their home loan.
First-time buyers can also use ING’s online tool to estimate the amount they can borrow. ING offers home loan applicants a free property report to look up property value estimates.
First home loan applicants struggling to understand the terms used may consider looking up ING’s first home buyer guide. Once the home buyer is ready to apply for the loan, they can complete an online application or call ING at 1800 100 258 during regular business hours.
Where can I get all the information about an ANZ first home buyer’s loan?
As a first home buyer, you may require help and hand-holding, and as such ANZ has the buying your first home section on its website full of important information. ANZ also has a form in this section you can fill out to get a free consultation from an ANZ First Home Coach and create your own plan for buying your first home. This coach will help you understand where your current income is being spent and plan for your home loan repayments. You’ll get a clear picture of the costs involved in purchasing a property and how to budget or save for these costs. The coach will help you understand different deposit options and manage your accounts to enhance your savings.
There are three types of ANZ first home loans - Standard Variable, Fixed, and Equity Manager. The features, interest rates, and terms for each are different, and you can compare them here.
When they apply for an ANZ home loan, first home buyers can also get guidance on applying for the First Home Owner Grant (FHOG). This is a one-off government grant that may be available to you when you’re buying your first home. The eligibility criteria for FHOG differs between the different states and territories, which is why it’s helpful to have expert advice when applying.
How much is the first home buyer's grant?
The first home buyer grant amount will vary depending on what state you’re in and the value of the property that you are purchasing. In general, they start around $10,000 but it is advisable to check your eligibility for the grant as well as how much you are entitled to with your state or territory’s revenue office.
Do first-time home loan applicants qualify for tax benefits?
If you’re a first-time homebuyer applying for a home loan, you could qualify for some tax deductions, but only if your property is a source of income for you. For instance, if you rent out the property, you could get tax deductions on the cost of constructing or renovating it, the loss in value of depreciating assets such as furniture or electrical fixtures, and the home loan interest.
Homeowners using their property as a residence could also get a tax deduction if a part or all of it is used for business. These deductions include tax write-offs for depreciating assets and deductions for operating expenses like utilities’ payments and service charges for phones and the internet. However, people running businesses from their residences don’t qualify for a tax deduction on the interest paid on their home loans.
How do I apply for Westpac’s first home buyer loan?
If you’re a first home buyer looking to apply for a home loan with Westpac, they offer an online home loan application. They suggest the application can be completed in about 20 minutes. Based on the information you provide, Westpac will advise you the amount you can borrow and the costs associated with any possible home loan.
When applying for a home loan with Westpac, you’re assigned a home finance manager who can address your concerns and provide information. The manager will also offer guidance on any government grants you may be eligible for.
What does unconditional approval from Aussie Home Loans mean for first time home buyers?
As an Aussie home loan first time home buyer, your loan application passes through multiple stages. Early in the process, you’ll receive conditional approval, which means the lender approves your loan application as long as you meet certain conditions. Some of these criteria include selling another property or repaying existing debt.
The next stage is unconditional approval which is the final decision from the lender. After considering all the relevant information, the lender is willing to offer you a certain amount to buy a specific property.
Unconditional approval is also known as formal or full approval but receiving this doesn’t mean you need to accept the money. If you choose to proceed and accept the funds, you’ll sign the loan documents to finalise the loan and receive the money. You can, at this time, clarify any doubts you have with your Aussie broker.
You’re likely to get conditional approval, sometimes called pre-approval, when you want to get clear on your budget. You’ll then apply for unconditional or formal approval once you’ve found a property and made an offer. This process will involve the lender reviewing your finances and the details of the property you wish to purchase to make sure you can repay a loan on that property.
As a first time buyer, it may help you with the purchasing process to seek pre-approval or conditional approval. This may speed up the final purchasing process and help you through the home loan process in steps rather than all at once.
What is a low-deposit home loan?
A low-deposit home loan is a mortgage where you need to borrow more than 80 per cent of the purchase price – in other words, your deposit is less than 20 per cent of the purchase price.
For example, if you want to buy a $500,000 property, you’ll need a low-deposit home loan if your deposit is less than $100,000 and therefore you need to borrow more than $400,000.
As a general rule, you’ll need to pay LMI (lender’s mortgage insurance) if you take out a low-deposit home loan. You can use this LMI calculator to estimate your LMI payment.
How much deposit do I need for a home loan from NAB?
The right deposit size to get a home loan with an Australian lender will depend on the lender’s eligibility criteria and the value of your property.
Generally, lenders look favourably on applicants who save up a 20 per cent deposit for their property This also means applicants do not have to pay Lenders Mortgage Insurance (LMI). However, you may still be able to obtain a mortgage with a 10 - 15 per cent deposit.
Keep in mind that NAB is one of the participating lenders for the First Home Loan Deposit Scheme, which allows eligible borrowers to buy a property with as low as a 5 per cent deposit without paying the LMI. The Federal Government guarantees up to 15 per cent of the deposit to help first-timers to become homeowners.
What are the features of home loans for expats from Westpac?
If you’re an Australian citizen living and working abroad, you can borrow to buy a property in Australia. With a Westpac non-resident home loan, you can borrow up to 80 per cent of the property value to purchase a property whilst living overseas. The minimum loan amount for these loans is $25,000, with a maximum loan term of 30 years.
The interest rates and other fees for Westpac non-resident home loans are the same as regular home loans offered to borrowers living in Australia. You’ll have to submit proof of income, six-month bank statements, an employment letter, and your last two payslips. You may also be required to submit a copy of your passport and visa that shows you’re allowed to live and work abroad.
When does Commonwealth Bank charge an early exit fee?
When you take out a fixed interest home loan with the Commonwealth Bank, you’re able to lock the interest for a particular period. If the rates change during this period, your repayments remain unchanged. If you break the loan during the fixed interest period, you’ll have to pay the Commonwealth Bank home loan early exit fee and an administrative fee.
The Early Repayment Adjustment (ERA) and Administrative fees are applicable in the following instances:
- If you switch your loan from fixed interest to variable rate
- When you apply for a top-up home loan
- If you repay over and above the annual threshold limit, which is $10,000 per year during the fixed interest period
- When you prepay the entire outstanding loan balance before the end of the fixed interest duration.
The fee calculation depends on the interest rates, the amount you’ve repaid and the loan size. You can contact the lender to understand more about what you may have to pay.
Why does Westpac charge an early termination fee for home loans?
The Westpac home loan early termination fee or break cost is applicable if you have a fixed rate home loan and repay part of or the whole outstanding amount before the fixed period ends. If you’re switching between products before the fixed period ends, you’ll pay a switching break cost and an administrative fee.
The Westpac home loan early termination fee may not apply if you repay an amount below the prepayment threshold. The prepayment threshold is the amount Westpac allows you to repay during the fixed period outside your regular repayments.
Westpac charges this fee because when you take out a home loan, the bank borrows the funds with wholesale rates available to banks and lenders. Westpac will then work out your interest rate based on you making regular repayments for a fixed period. If you repay before this period ends, the lender may incur a loss if there is any change in the wholesale rate of interest.
When do mortgage payments start after settlement?
Generally speaking, your first mortgage payment falls due one month after the settlement date. However, this may vary based on your mortgage terms. You can check the exact date by contacting your lender.
Usually your settlement agent will meet the seller’s representatives to exchange documents at an agreed place and time. The balance purchase price is paid to the seller. The lender will register a mortgage against your title and give you the funds to purchase the new home.
Once the settlement process is complete, the lender allows you to draw down the loan. The loan amount is debited from your loan account. As soon as the settlement paperwork is sorted, you can collect the keys to your new home and work your way through the moving-in checklist.
Cash or mortgage – which is more suitable to buy an investment property?
Deciding whether to buy an investment property with cash or a mortgage is a matter or personal choice and will often depend on your financial situation. Using cash may seem logical if you have the money in reserve and it can allow you to later use the equity in your home. However, there may be other factors to think about, such as whether there are other debts to pay down and whether it will tie up all of your spare cash. Again, it’s a personal choice and may be worth seeking personal advice.
A mortgage is a popular option for people who don’t have enough cash in the bank to pay for an investment property. Sometimes when you take out a mortgage you can offset your loan interest against the rental income you may earn. The rental income can also help to pay down the loan.
How much deposit do I need for a home loan from ANZ?
Like other mortgage lenders, ANZ often prefers a home loan deposit of 20 per cent or more of the property value when you’re applying for a home loan. It may be possible to get a home loan with a smaller deposit of 10 per cent or even 5 per cent, but there are a few reasons to consider saving a larger deposit if possible:
- A larger deposit tells a lender that you’re a great saver, which could help increase the chances of your home loan application getting approved.
- The more money you pay as a deposit, the less you’ll have to borrow in your home loan. This could mean paying off your loan sooner, and being charged less total interest.
- If your deposit is less than 20 per cent of the property value, you might incur additional costs, such as Lenders Mortgage Insurance (LMI).
How much are repayments on a $250K mortgage?
The exact repayment amount for a $250,000 mortgage will be determined by several factors including your deposit size, interest rate and the type of loan. It is best to use a mortgage calculator to determine your actual repayment size.
For example, the monthly repayments on a $250,000 loan with a 5 per cent interest rate over 30 years will be $1342. For a loan of $300,000 on the same rate and loan term, the monthly repayments will be $1610 and for a $500,000 loan, the monthly repayments will be $2684.
What are the pros and cons of no-deposit home loans?
It’s no longer possible to get a no-deposit home loan in Australia. In some circumstances, you might be able to take out a mortgage with a 5 per cent deposit – but before you do so, it’s important to weigh up the pros and cons.
The big advantage of borrowing 95 per cent (also known as a 95 per cent home loan) is that you get to buy your property sooner. That may be particularly important if you plan to purchase in a rising market, where prices are increasing faster than you can accumulate savings.
But 95 per cent home loans also have disadvantages. First, the 95 per cent home loan market is relatively small, so you’ll have fewer options to choose from. Second, you’ll probably have to pay LMI (lender’s mortgage insurance). Third, you’ll probably be charged a higher interest rate. Fourth, the more you borrow, the more you’ll ultimately have to pay in interest. Fifth, if your property declines in value, your mortgage might end up being worth more than your home.
What is a secured home loan?
When the lender creates a mortgage on your property, they’re offering you a secured home loan. It means you’re offering the property as security to the lender who holds this security against the risk of default or any delays in home loan repayments. Suppose you’re unable to repay the loan. In this case, the lender can take ownership of your property and sell it to recover any outstanding funds you owe. The lender retains this hold over your property until you repay the entire loan amount.
If you take out a secured home loan, you may be charged a lower interest rate. The amount you can borrow depends on the property’s value and the deposit you can pay upfront. Generally, lenders allow you to borrow between 80 per cent and 90 per cent of the property value as the loan. Often, you’ll need Lenders Mortgage Insurance (LMI) if the deposit is less than 20 per cent of the property value. Lenders will also do a property valuation to ensure you’re borrowing enough to cover the purchase.
Will I have to pay lenders' mortgage insurance twice if I refinance?
If your deposit was less than 20 per cent of your property’s value when you took out your original loan, you may have paid lenders’ mortgage insurance (LMI) to cover the lender against the risk that you may default on your repayments.
If you refinance to a new home loan, but still don’t have enough deposit and/or equity to provide 20 per cent security, you’ll need to pay for the lender’s LMI a second time. This could potentially add thousands or tens of thousands of dollars in upfront costs to your mortgage, so it’s important to consider whether the financial benefits of refinancing may be worth these costs.