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FHB deposit scheme passes the Senate

Legislation to implement the federal government’s First Home Loan Deposit Scheme has now passed through the Senate, after opposition amendments were made to incorporate proper review of the effectiveness of the scheme.

The $500-million scheme is designed to provide first home buyers (FHBs) earning up to $125,000 ($200,000 for couples) with “a significant leg up” by making available to them 95 per cent loan-to-value ratio mortgages should they have a deposit of at least 5 per cent, without the requirement to pay lenders mortgage insurance (LMI).

The legislation, which involves the amendment of the National Housing Finance and Investment Act 2018 to incorporate the functionality of the First Home Loan Deposit Scheme, was introduced to Parliament last month, and was officially passed through the Senate earlier this week with minor amendments.

The amendments to the bill were introduced by opposition Deputy Whip senator Murray Watt, surrounding the ALP’s wish to have the scheme reviewed more often than every three years, as the original bill stated.

In discussion on the passing of the bill in the Senate, which took place on Monday, 14 October, Mr Watt highlighted that as the legislation itself does not provide great detail on the specifics of the scheme, it is vital that the effectiveness of the scheme be reviewed every 12 months.


Mr Watt said: “...the bill in front of us does not have any real detail of the scheme. It does not include what the price caps will be. It does not provide any detail as to how this will change depending on the regional location. 

“In fact, almost all of the detail of this scheme will be included in an updated investment mandate ... For these reasons, it's important that the scheme is properly scrutinised.”

Mr Watt stated that within the next 12 months, the scheme could potentially be used to guarantee up to 20,000 purchases, and the original explanatory memorandum of the bill states the scheme will only be subject to review in up to three years.

“We on this side think that this is too long, given the importance of housing for the economy and the struggles currently faced by first home buyers,” he said.

“That's why I have circulated an amendment in my name that will ensure this program is reviewed every 12 months.”


The amendments put forward by Mr Watt were approved and the bill was passed.

Commenting on the announcement, Minister for Housing and Assistant Treasurer Michael Sukkar said: “First home buyers will be able to enter the property market sooner after the Coalition Government passed new laws through the Parliament today to implement the First Home Loan Deposit Scheme, and the National Housing Finance and Investment Corporation's new research function.”

He also stated: “The scheme complements other government initiatives to reduce pressure on housing affordability in Australia and support local communities.”

[Related: Consultation opens for FHB loan scheme]

FHB deposit scheme passes the Senate
Senate chamber

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Hannah Dowling

Hannah Dowling is a journalist for mortgage business, the leading source of news, opinion and strategy for professionals working in the mortgage industry.

Prior to joining the team at Mortgage Business, Hannah worked as a content producer for a podcast catering to property investors. She also spent 6 years working in the real estate sector at a local agency. 

Hannah graduated from Macquarie University with a Bachelor of Media and Journalism. 

You can email Hannah at: This email address is being protected from spambots. You need JavaScript enabled to view it.

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