Aspiring homeowners in Australia often face one major hurdle when it comes to buying their first property: saving up for a sufficient deposit. In response to this challenge, the Australian government introduced the First Home Loan Deposit Scheme (FHLDS) to help eligible first-time buyers get onto the property ladder sooner.
Q: What is the First Home Loan Deposit Scheme (FHLDS)?
A: The First Home Loan Deposit Scheme is a government initiative designed to assist first home buyers to purchase a home with a deposit as little as 5% of the property’s value, without having to pay Lender’s Mortgage Insurance (LMI). LMI is typically required by banks when a borrower has less than 20% deposit, and it can cost thousands of dollars upfront. The FHLDS allows first home buyers to avoid this cost and enter the property market with a lower deposit.
Q: Who is Eligible for the FHLDS?
A: To be eligible for the First Home Loan Deposit Scheme, you must meet the following criteria:
- Be an Australian citizen aged 18 years or over (permanent residents are not eligible).
- Have never owned or co-owned a property in Australia before.
- Have a taxable income of up to $125,000 per annum for singles or $200,000 for couples (based on the previous financial year’s income).
- Have at least 5% of the property’s value as a deposit.
- Plan to use the property as your primary place of residence.
- Meet the lender’s eligibility criteria.
It’s important to note that there are only a limited number of places available under the FHLDS each year, and they are allocated on a first-come, first-served basis. This means that you’ll need to act quickly to secure a spot in the scheme.