First Home Deposit Scheme Rules

Following the passage of legislation establishing the First Home Loan Deposit Scheme, the Government has published the proposed eligibility rules and APRA is consulting on the capital treatment of mortgages covered by the Scheme. Background.

Eligibility rules

The Government has released for consultation the draft Investment Mandate for the First Home Loan Deposit Scheme.

The National Housing Finance and Investment Corporation (NHFIC) Investment Mandate Amendment (First Home Loan Deposit Scheme) Direction 2019, sets out the core elements of the Scheme including the property price caps.

Applicants will be subject to eligibility criteria, including having taxable incomes up to $125,000 per annum for singles and up to $200,000 per annum for couples.

The Scheme will apply to owner-occupied loans on a principal and interest basis.

Property price caps under the Scheme set price thresholds in capital cities, large regional centres with a population over 250,000 and regional areas.

The capital city price caps will apply to large regional centres with a population in excess of 250,000, namely the Gold Coast, Newcastle and Lake Macquarie, the Sunshine Coast, Illawarra (Wollongong) and Geelong.

State/territory Capital city and regional centres Rest of state
NSW $700,000 $450,000
VIC $600,000 $375,000
QLD $475,000 $400,000
WA $400,000 $300,000
SA $400,000 $250,000
TAS $400,000 $300,000
ACT $500,000
NT $375,000

Capital treatment of First Home Loan Deposit Scheme mortgages

The Australian Prudential Regulation Authority (APRA) has released for consultation its proposed revision to the capital treatment for eligible mortgages covered by the Government’s First Home Loan Deposit Scheme.

Recognising both the minimum 5 per cent deposit required of borrowers and the Government guarantee of 15 per cent of the property purchase price, APRA proposes to allow ADIs to treat eligible FHLDS loans in a comparable manner to mortgages with a loan-to-valuation ratio of 80 per cent. This would allow eligible FHLDS loans to be risk-weighted at 35 per cent under APRA’s current capital requirements. Once the Government guarantee ceases to apply to eligible loans,1 ADIs would revert to applying the relevant risk weights as set out in APS 112.

Print Friendly, PDF & Email

Your Compliance Support Plan

We understand you need a cost-effective way to keep up to date with regulatory changes. Talk to us about our fixed price plans.