First Home Loan Deposit Scheme: High demand expected for round two

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on June 29, 2020
First Home Loan Deposit Scheme: High demand expected for round two

Photo by Karolina Grabowska from Pexels

Buyers are being urged to get in quick for the second round of the First Home Loan Deposit Scheme, with banks expecting a rush of applications.

If you missed out the first time, the second round of the First Home Loan Deposit Scheme will kick off on 1 July with a further 10,000 spots up for grabs, but you'd better make sure you get your application in quickly.

Despite the economic uncertainty of the impact of COVID-19 on the property market, applications for the second round of the scheme are expected to be keenly sought.

The First Home Loan Deposit Scheme (FHLDS) is a government initiative designed to help eligible first home buyers secure their first home with a deposit as low as 5% by guaranteeing up to 15% of the value of the home, thus avoiding costly Lenders Mortgage Insurance (LMI).

Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.

Lender
Advertised rate Comparison rate* Monthly repayment Rate TypeOffsetRedrawOngoing FeeUpfront FeesLVRLump Sum RepaymentAdditional RepaymentsPre-approval

VariableMore details
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
VariableMore details
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
FixedMore details
USE A MARKET LEADING APP TO HELP YOU PAY OFF YOUR LOAN SOONER

Fixed Home Loan 1 year (Principal and Interest) (LVR < 80%)

  • Make up to $20,000 additional repayments per fixed term
  • Redraw available – lets you access any extra loan repayments you’ve made
  • Choose to rate lock for 90 days (fee applies)
USE A MARKET LEADING APP TO HELP YOU PAY OFF YOUR LOAN SOONER

Fixed Home Loan 1 year (Principal and Interest) (LVR < 80%)

  • Make up to $20,000 additional repayments per fixed term
  • Redraw available – lets you access any extra loan repayments you’ve made
  • Choose to rate lock for 90 days (fee applies)
VariableMore details
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • No application or ongoing fees.
  • 100% free offset sub account.
  • Fast online application, approval in minutes not weeks.
  • Mobile app, Visa debit card, Apple and Google Pay
  • Refinance loans and variable rates only.
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • No application or ongoing fees.
  • 100% free offset sub account.
  • Fast online application, approval in minutes not weeks.
  • Mobile app, Visa debit card, Apple and Google Pay
  • Refinance loans and variable rates only.
VariableMore details
ZERO APPLICATION FEESFEE FREE OFFSET

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
  • No upfront or ongoing fees
ZERO APPLICATION FEESFEE FREE OFFSET

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
  • No upfront or ongoing fees

Rates correct as of January 18, 2022. View disclaimer.

The scheme's first 10,000 places, released on 1 January 2020, showed strong demand for the program particularly among first home buyers under the age of 30.

One of those buyers was 26-year-old Blaise Menzies-White who bought his first property in Victoria after securing a spot in the scheme through Bendigo Bank.

“That’s what made it possible for me to buy my first home - it was the difference between buying right now and waiting another couple of years to save the $20,000-$30,000 extra I would have needed to make the minimum deposit," he said.

Mr Menzies-White said the COVID-19 pandemic only strengthened his decision to purchase a bigger home. 

“COVID-19 has been really stressful for so many people. I think people are going to want more space in everything, when they eat out, go out and perhaps also in how they live. Shoebox style apartments in cities may not be as popular that they once were for the fear of germs and catching disease.

“I’m very lucky that I have a property with a lot of space, that I was able to purchase before COVID-19, that I am still employed, and that my friends live with me to help pay the mortgage.”

According to the latest figures from the National Housing Finance and Investment Corporation (NHFIC) (the entity administering the scheme) 5,500 guarantees have been issued, with another 4,500 having reserved a guarantee and in the process of finding their first home.

With the second round of the scheme kicking off on 1 July, here are a few things buyers need to know before applying for the scheme. 

Read: The complete guide to the First Home Loan Deposit Scheme

Can you apply for the scheme if you haven't lodged your tax return?

If you want to apply for the scheme, you'll need to provide a Notice of Assessment from the Australian Taxation Office for the 2019-20 financial year.

This means you'll need to lodge your tax return ASAP if you want to apply for the scheme when it kicks off on 1 July.

Can you use the scheme in conjunction with the HomeBuilder grant?

Yes. The $25k HomeBuilder scheme can be used in conjunction with existing state and territory First Home Owner Grant programs, stamp duty concessions and other grant schemes, as well as the Commonwealth’s First Home Loan Deposit Scheme and First Home Super Saver Scheme.

Essentially this means you could use the FHLDS to buy your first home, then take advantage of the $25k HomeBuilder grant to renovate it into your dream property.


Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered. Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please visit the web site links at the bottom of this page.

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author-avatar
Emma Duffy is Assistant Editor at Your Mortgage and  Your Investment Property Mag, which are part of the Savings Media Group. In this role, she manages a team of journalists and expert contributors committed to keeping readers informed about the latest home loan and finance news and trends, as well as providing in-depth property guides. She is also a finance journalist at Savings.com.au which she joined shortly after its launch in early 2019. Emma has a Bachelor in Journalism and has been published in several other publications and been featured on radio.

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