First Home Loan Deposit Schemes - Are you eligible?


If you're a first home buyer and you're in Australia then you my friend, are in luck.

The Australian government is offering a small range of valuable concessions at the moment to make the dream of becoming a homeowner a reality for many Aussies out there.

The First Home Loan Deposit Scheme

As part of the Australian Federal Budget Announcement for 2020, Treasurer Josh Frydenburg declared that an extra 10,000 places would be added to the existing First Home Loan Deposit Scheme (FHLDS). 

This scheme is one of the major ways the government is offering a leg up to those dreaming of holding the keys to their own place. 

The premise of this scheme is that it enables borrowers to take out a loan with a lender with a smaller deposit than would be typically required. 

Generally speaking, if you want to take out a mortgage you need to have a deposit of 20% to receive an approved loan by the bank. So, if you wanted to purchase a home for $500,000, you would require a $100,000 deposit up front.

If you didn’t quite have the $100,000 to begin with, you could potentially still get a loan, however it’s likely the lender would charge you Lenders Mortgage Insurance, or LMI. This is an insurance taken out by the bank, to cover them in case you happen to default on your repayments. Essentially it’s a premium that the borrower has to pay to give the bank peace of mind.

There is another solution for those who are seeking a mortgage but have a small deposit and don’t wish to pay LMI. In these cases, you can get someone to act as guarantor for the loan. A guarantor is legally bound to make repayments for the loan, should you default.

The FHLDS means that for borrowers that have less than 20% deposit, the Australian government has volunteered to act as guarantor for the loan. This is enabling First Home Buyers to purchase a home with as little as 5% deposit.

In some cases first home buyers may ask a friend or family member to act as guarantor for them. In this case, the government will take that role for you. 

To see if you are eligible for this scheme, visit the First Home Loan Deposit Scheme website.

To apply for this scheme, you can go directly to any of the 27 approved lenders outlined here.

There are limited places for this, and certain criteria regarding house type and price so be sure to do your research and find out if it’s right for you.

One of the greatest benefits of this scheme is that it can be used in conjunction with the existing First Home Owners Grant (FHOG). 

So for first home buyers right now, you could potentially benefit from both the First Home Loan Deposit Scheme and the First Home Owners Grant which can total thousands of savings for those entering the property market. 

The First Home Owners Grant 

The FHOG Scheme has been in place for two decades, after being introduced back in 2000 by the Howard government. Over the years it’s seen many iterations and changes to the scheme, and the benefits and eligibility requirements are different depending on the State or Territory that you live in.

The premise of this scheme is to give first home buyers a leg up by either providing a money grant, reduced stamp duty costs or reduced transfer duty rates. This essentially provides a financial incentive for those looking to buy. The benefit and the criteria varies between States and Territories.

To make it a bit easier, check out our overview below.

New South Wales

Grant: $10,000

Criteria: This applies to those buying or building a new home with a total value of less than $600,000.


Grant: $10,000 or to $20,000 if you are buying regionally and have a contract signed between 1 July 2017 to 30 June 2021

Criteria: Cannot be an investment property or a holiday house. Applies to new homes or homes under construction only. The owner is required to live in the home for 12 months after purchasing.

Western Australia

Grant: $10,000

Criteria: Must be purchasing a new home or constructing a new home. The grant does not apply for established homes, the exception for this is if the home has been substantially renovated. The owner is required to live in the home for a continuous 6 month period after purchase.


Grant: Up to $15,000

Criteria: You may purchase a house, townhouse or unit below the value of $750,000. The property must be under construction or newly built.

South Australia

Grant: Up to $15,000

Criteria: For new homes only. The market value of the property must not exceed $575,000.

Northern Territory

Grant: $10,000

Criteria: This once off payment applies for new homes only. The NT also offers a Territory Home Owner Discount that buyers may be eligible for.


Grant: Up to $20 000 or 50% discount on property transfer duty

Criteria: For first home buyers who are building a new residence or purchasing a newly built property.

The discount of property transfer duty is for first home buyers of established homes, which have a dutiable value of $400 000 or less.

Australian Capital Territory

Grant: The FHOG changed on the 1st July 2019 for those dwelling in the ACT.

Criteria: The FHOG scheme has been replaced with the Home Buyer Concession Scheme which will provide a full duty concession for eligible applicants.

In all cases, many other conditions apply. The FHOG is a very complex, information laden scheme. It is however well worth investigating to see if it could benefit you. For more information about the FHOG and to find out if you qualify, visit

The information in this article is up to date as at 23rd October 2020. Please be sure to do your research if you are reading this in the future as the grants, concessions and criteria may have changed since the time of publishing.

Disclaimer: The author is not a financial advisor and the information provided is general in nature and was prepared for information purposes only. This article should not be considered to constitute financial advice. Accordingly, reliance should not be placed on this article as the basis for making an investment, financial or other decision. This information does not take into account your investment objectives, particular needs or financial situation.

Turn your learnings into practice
Try WeMoney today.