First home loan deposit scheme introduced

October 18, 2019

Legislation has passed that allows eligible first home buyers to purchase a house with as little as a 5% deposit.

The National Housing Finance and Investment Corporation Amendment Bill 2019 has established the First Home Loan Deposit Scheme to help first home buyers access the housing market sooner.

While the Government has stated that some details about the Scheme will need to be confirmed before it commences, some known key features are:

  • it will commence on 1 July 2020 the number of approvals will be capped at 10,000 pa
  • the National Housing Finance and Investment Commission will guarantee the difference between the deposit accumulated (a minimum of 5%) and 20% of the purchase price applicants must be first home buyers (currently not defined) who are purchasing or building an owner-occupied dwelling and earn less than $125,000 pa (for individuals) or $200,000 pa (for couples combined)
  • where there are multiple applicants for a loan, all applicants are required to meet all eligibility criteria
  • regular principal repayments are required (ie the loan cannot be interest only)
  • regional caps (to be determined after industry consultation) will apply to the purchase price to ensure participation is spread fairly across the country, and
  • the scheme will complement (but not directly interact with) other measures such as the Government’s First Home Super Saver Scheme and First Home Buyer grants, as well as State and Territory based stamp duty concessions.


The application process has not yet been confirmed.