The First Home Loan Deposit Scheme

Find out how you can buy a home with a small deposit! The "First Home Loan Scheme", can make your dreams of home ownership possible.

Maybe you always dreamed of homeownership, but have been dismayed due to soaring house prices, or perhaps you have found property you like, but need assistance taking the first, and understanding exactly how much you will need to make the deposit.

However your situation may be, you will be pleased to know that the Australian Government has launched a new initiative called the “First Home Loan Deposit Scheme” (New Homes), which is giving many individuals the opportunity to buy a home with a deposit as small as 5% (lenders criteria apply), and subsequently avoid paying LMI (Lenders Mortgage Insurance).

The FHLDS has helped many Australians achieve their home ownership goals, since 2020.

Find out more about how you can benefit from FHLDS in 2021!

FHLDS in 2021 

The 2020-21 Federal Budget is still committed to backing the goals of first home buyers, and is providing an extra ten thousand FHLDS spots for the 2020 -2021 financial year, by re-issuing unused guarantees (from buyers who did not complete the purchase of their first home), from the initial phase of the scheme.

The second phase of the scheme (for the financial year of 2020-21) is available for the following first home buyers:

  • 10,000 FHLDS spots for buyers wishing to build, or buy a new home.
  • 10,000 FHLDS spots for first home buyers wishing to buy an existing home.

It is safe to say that 2021 just might be a promising year for first home buyers to acquire a home. As first home buyers will benefit from low interest rates in the current market, and also from First Home Loan Deposit Scheme places. Provided that applications are made for the FHLDS through appointed lenders, before 30 June 2021.

Are there any property price limits for the  FHLDS?

Price caps apply to capital cities with a population of over 250,000 (Newcastle, Lake Macquarie, the Sunshine Coast, Geelong, Illawarra (Wollongong) and the Gold Coast).

Price limits for new homes under the First Home Loan Deposit Scheme, are as follows:

There is no doubt that bigger cities will to tend have slightly higher prices than other areas.

What are the pros and cons to the First Home Loan Deposit Scheme?


  • The FHLDS offers certain flexibility in your purchase, allowing you to buy existing homes, an off-the-plan home, a house, or even a land package (unlike the First home Owner’s Grant).
  • The FHLDS can enable you to purchase your first home faster, and avoid paying LMI (Lenders Mortgage Insurance).
  • Participating lenders will not charge you a higher interest rate   if you make a low deposit.


  • Even if you are eligible, you might not qualify under the FHLDS scheme, as it set up to only support the first 10,000, first home buyers.
  • The scheme will enable you to buy your home faster, but you will also pay more interest over time.
  • It may be hard to refinance in the future if you are buying with a larger loan (a higher LVR), as you many not always get competitive rates from lenders. 

Can I qualify for both the First Home Loan Deposit, and the First Home Owner Grant?


You can be eligible to qualify for both the First Home Loan Deposit Scheme and the First Home Owner’s Grant, and by qualifying for both, you may be able to avoid paying stamp duty (in part, or full). 


Eligibility for the first home loan deposit scheme is base on several factors relating to your personal and financial circumstances.

The following information will help you determine which category you fit into, and what criteria will need to be adhered to:

If you are planning on purchasing your first home with your de facto partner, or spouse (where both persons are named as borrowers on the home loan), then you would both be required to apply under the FHLDS as a couple.

If you are purchasing your first home as a sole borrower, then you will apply under the FHLDS as a single.

Whether applying solely for your self (as a single), or with your partner (as a couple), you will also need to satisfy the following eligibility checks as below:

Check your eligibility!        

Applicants must soundly satisfy all the criteria above, in order to be eligible.

How do applicants apply to the First Home Loan Deposit Scheme?

You can lodge your application through participating lenders, with the help of an Abacus home Loan Specialist.

Got a FHLDS question?

If you need any help proceeding, or simply want to check your eligibility for the FHLDS, then contact Abacus Home Loans today! Our friendly home loan specialists will be happy to answer any questions that you have in mind.

Call Abacus Finance on 1300 268 686, or email us today! 

The information in this post is general in nature and should not be considered personal or financial advice. You should always seek professional advice or assistance before making any financial decisions.

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