How to Buy Your First Home With a 5% Deposit

02 Jul How to Buy Your First Home With a 5% Deposit

If you’ve saved 5% of the purchase price of your property the government can guarantee the remaining 15% of the deposit through the First Home Loan Deposit Scheme (FHLDS).

How to buy your first home with a 5% deposit

However, access to the scheme is limited to 10,000 borrowers and the second round already launched last July 1st. So to make sure you can snap up one of the available spots, you should be doing all you can to put yourselves in the best possible position.

Now let’s go further and address the details of the scheme and see how you can secure your spot. First question: what is the first step?

Check your eligibility.

✔ You must be an Australian citizen and at least 18 years of age.

✔ You must be a first home buyer, meaning you haven’t previously owned or had an interest in a residential property, either separately or jointly.

✔ You must have a deposit of between 5% and 20% of the property you intend to buy.

✔ Individuals must have a taxable income of no more than $125,000 per annum, while couples must have a combined taxable income of no more than $200,000.

✔ Couples must be married or in a de facto relationship.

✔ You must be taking out an owner occupied loan and making principal and interest repayments. Investment and interest only loans are not eligible under the Scheme. 

✔ The total value of the property must not exceed the NFIC’s price threshold, which varies by region.

See if your choice of property can be bought under the Scheme.

  • An existing house, townhouse or apartment
  • A house and land package
  • Land together with a separate contract to build a home
  • An off-the-plan apartment or townhouse

The value of your residential property must not exceed the price cap for the area in which the property is located.

For Western Australia, the price cap for capital cities and regional centres is $400,000 and $300,000 for the rest of the state.

Find a participating lender.

To secure a spot, you’ll need to speak directly with a participating lender or with a professional finance broker in your local area. A full list of banks and lenders involved in the Scheme is available here. You can apply for a Scheme-backed loan with more than one participating lender, so you can shop around for a competitive home loan rate. You will only receive one place under the Scheme, no matter how many lenders you approach.

Prepare your documents.

This includes identification details, Medicare card and either a valid Australian passport or proof of Australian citizenship. It is important to have these documents ready so the process goes smoothly.

Speak to a finance broker.

Once you equipped yourself with the above details, you are now more than ready to make an informed decision. Since the National Housing Finance and Investment Corporation (NHFIC) is not accepting applications directly, applications can be lodged through participating lenders and their brokers. Applying for a loan can be a tedious process especially if you decided to login multiple applications. To avoid the legwork, seeking the help of a professional mortgage broker or finance broker is really beneficial.

With the scheme, purchasing your first every property in Perth means you only need $20,000 – $80,000 deposit for a $400,000 property or $15,000 – $60,000 for a $300,000 property! If you have more questions, please don’t hesitate to give me a ring on 0408 081 082.



Credit Representative Number 486927 is authorised under Australian Credit Licence 389328.

This article provides general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances and your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances. Subject to lenders terms and conditions, fees and charges and eligibility criteria apply.

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