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The initial panel of the government’s First Home Loan Deposit Scheme has been announced, with 27 lenders selected.
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First home loan deposit lenders announced
16 December 2019
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The National Housing Finance and Investment Corporation (NHFIC) has announced its full panel of lenders taking part in the federal government’s First Home Loan Deposit Scheme (FHLDS).
Following on from the announcement that NAB had been chosen as the first major lender for the panel, Commonwealth Bank has been named as the second major bank to offer loans under the scheme, along with 25 non-major lenders.
The participating lenders will have the ability to write loans for first home buyers (FHBs) who have saved deposits as little as 5 per cent, with the government set to guarantee the rest of the deposit under the FHLDS.
CBA and NAB will reportedly be able to issue up to 50 per cent of the 10,000 annual guaranteed loans provided per financial year, according to the NHFIC Investment Mandate.
The two major banks will be accepting applications for the scheme from 1 January 2020.
The other 50 per cent of guaranteed loans will be written by the other non-major lenders on the NHFIC lending panel.
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The non-majors will be taking applications from 1 February 2020.
The full list of lenders on the panel, along with NAB and CBA, is as follows:
- Australian Military Bank
- Auswide Bank
- Bank Australia
- Bank First
- Bank of us
- Bendigo Bank
- Beyond Bank Australia
- Community First Credit Union
- CUA
- Defence Bank
- Gateway Bank
- G&C Mutual Bank
- Indigenous Business Australia
- Mortgageport
- MyState Bank
- People’s Choice Credit Union
- Police Bank (including the Border Bank and Bank of Heritage Isle)
- P&N Bank
- QBANK
- Queensland Country Credit Union
- Regional Australia Bank
- Sydney Mutual Bank and Endeavour Mutual Bank (divisions of Australian Mutual Bank)
- Teachers Mutual Bank Ltd (including Firefighters Mutual Bank, Health Professionals Bank, Teachers Mutual Bank and UniBank)
- The Mutual Bank
- WAW Credit Union
Applications for the scheme will begin on 1 January 2020 and can be made either directly to participating lenders or via the broker channel. The NHFIC will not be taking any direct applications.
According to the NHFIC, members of the panel have been chosen on the basis of competitiveness of offerings, geographic reach, customer care and their ability to meet the deadline for the implementation of the scheme.
Further, the NHFIC and federal Minister for Housing and Assistant Treasurer Michael Sukkar have stated that members on the lending panel will not be able to charge eligible customers higher interest rates than equivalent customers outside the scheme.
Additional lenders may be “periodically” added to the panel after the scheme has launched, according to the NHFIC.
Mutual banks leading the charge for FHBs
Notably, the vast majority of lenders included on the panel are mutual banks and credit unions.
The Customer Owned Banking Association (COBA) welcomed this fact, stating that the inclusion of so many customer-owned banking institutions highlighted the importance of the sector in providing options and competition for borrowers in the home loan market.
CEO of COBA Michael Lawrence stated: “Customer-owned banking institutions are excited to work with the federal government to help more Australians enter the property market.
“We appreciate the government’s commitment to competition and choice by ensuring smaller lenders are so well represented in the scheme.”
Panel will ‘enable strong activation of mortgage broker channels’
Commenting on the news, Minister for Housing Michael Sukkar commented: “The Morrison Coalition government is committed to helping make home ownership a reality for more Australians and to get them into the property market sooner.
“Today, the government welcomes confirmation from the National Housing Finance and Investment Corporation 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.
“The National Australia Bank and Commonwealth Bank of Australia, together with 25 non-major lenders, have been appointed as participating lenders in the scheme.
“Importantly, all lenders have committed not to charge eligible customers higher interest rates than equivalent customers outside of the scheme.”
Mr Sukkar continued: “The scheme has been warmly welcomed by major industry peak bodies, and the composition of the initial lending panel reflects the industry’s confidence in the Morrison Coalition government’s plan to assist first home buyers.
“Further, 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.
“The composition of the panel should also enable strong activation of mortgage broker channels and promote choice for first home buyers.”
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