First Home Loan Deposit Scheme (FHLDS)

19 November 2019

From 1 January 2020, the National Housing Finance and Investment Corporation (NHFIC) will be in partnership with lenders to administer a new scheme called First Home Loan Deposit Scheme (FHLDS). The scheme allows first home buyers who only have a 5% deposit to purchase, without having to pay Lenders Mortgage Insurance (LMI).

What is LMI?

LMI protects the lenders, not the borrowers. If the borrower defaults on their home loan, the lender will be able to recover the shortfall from the LMI provider. A shortfall occurs when the proceeds from the sale of your property is not enough to cover the amount that is owed to the lender.

Under FHLDS a borrower paying a 5% deposit will still be required to borrow 95% of the purchase price, but can avoid the LMI. Essentially, the government acts as a guarantor, guaranteeing the difference between the deposit and 20% of the purchase price.


Individuals with an income of up to $125,000.00 and $200,000.00 for couples can apply for the scheme.

However, access to the scheme is limited each year to the first 10,000.00 applicants. Additionally, the property prices cap at $600,000.00 for capital cities and regional centres and $375,000.00 for the rest of the state.


Unlike other government schemes, the FHLDS focuses on ensuring first home buyers can provide smaller deposit without having to pay LMI. Other schemes such as First Home Owners Grants and stamp duty concession also offers support to first home buyers, however under the schemes buyers may still be required to pay a higher deposit and pay the LMI.


The NHFIC has yet to announce the application process.

The NHFIC has yet to announce the application process.