- The Commonwealth Bank and the National Australia Bank (NAB) will be the only two banks to offer the first home loan scheme, the government has revealed.
- The scheme will see 27 lenders dole out mortgages to 10,000 first homebuyers with as little as 5% of their deposit and without having to pay mortgage insurance.
- The government has also confirmed that lenders won’t be charging higher interest rates to compensate as reportedly had been considered.
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The government has finally unveiled all the institutions involved in its first home loan deposit scheme.
The approved 27 lenders will be able to approve first homebuyers who have saved just a 5% deposit, instead of the regular 20%, without charging lenders mortgage insurance.
“Today, the government welcomes confirmation from the National Housing Finance and Investment Corporation (NHFIC) that 27 lenders have been selected, from a wide pool of applicants, to form the initial panel offering guarantee-backed loans under the First Home Loan Deposit Scheme,” Housing Minister and Assistant Treasurer Michael Sukkar said.
The Commonwealth Bank and NAB were the only two big banks to be included in the scheme aimed at increasing homeownership rates amid skyrocketing prices. Both banks will be able to collectively issue as many as half of the 10,000 loans to be administered under the scheme each year.
The rest will be split between the 25 other smaller lenders who were chosen, according to Sukkar, in order to cover the county.
“The scheme has been deliberately designed to ensure strong representation of smaller lenders on the panel. This will promote competition between the large and small banks, and ensure the Scheme has broad geographic reach, including in regional and remote communities,” he said.
To be eligible, single applicants must earn no more than $125,000 a year, and couples less than $200,000. The value of their purchase must also fall below certain thresholds dependent on their location.
Sukkar also addressed the suggestion that the big banks had been considering charging hiked up interest rates to applicants — an opportunistic policy that could effectively fleece first home buyers desperate to get on the property ladder and fatten profit margins.
“Importantly, all lenders have committed not to charge eligible customers higher interest rates than equivalent customers outside of the Scheme,” he said.
These are all 27 banks included:
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