First Home Buyers scheme: How to sign up

Details of the Federal Government’s new first-home buyers scheme – which starts on January 1 – have been revealed for the first time.

Find out how to sign up for the new first home buyers scheme.

• Read the ultimate first home buyers bible
• Government incentives: Are they worth it

Aspiring first-home buyers will have dozens of lenders to choose from under the Federal Government’s new scheme to help borrowers get a foot on the property ladder sooner.

The nation’s biggest bank, the Commonwealth Bank, is the second major lender to be given the green light to offer loans from January 1 under the First Home Loan Deposit Scheme.

They join National Australia Bank in offering these loans and also another 25 non-bank lenders.

The scheme has been rolled out by the Morrison Government and enables borrowers with deposits of just 5 per cent to be given a special government guarantee which allows them to avoid expensive lenders’ mortgage insurance.

Borrowers who do not have a 20 per cent deposit are hit with an LMI charge which costs thousands of dollars.

The new first home buyers scheme starts on January 1

It protects the lender not the borrower if there is a default on the loan.

The National Housing Finance and Investment Corporation today revealed 27 lenders who would be part of the scheme from next month.

The participating banks other than CBA and NAB include:

● 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

● P&N Bank

● QBANK

● Queensland Country Credit Union

● Regional Australia Bank

● Sydney Mutual Bank

● Endeavour Bank

● Teachers Mutual Bank Limited

● The Mutual Bank

● WAW Credit Union

All lenders involved in the scheme have committed they would not charge higher interest rates to successful applicants using the scheme.

The non-bank lenders will also receive no less than 50 per cent of the 10,000 guarantees allocated each financial year to ensure the big two banks don’t dominate the scheme.

CUA’s chief executive officer Paul Lewis said they were thrilled to be part of the scheme but home ownership remained tough for entry-level buyers.

The full list of banks offering the scheme has now been revealed. Picture: iStock

“In many parts of Australia particularly major cities like Sydney and Melbourne increasing property prices have made home ownership an unattainable dream for many people on low and middle incomes,” he said.

While CBA’s group executive Angus Sullivan said they could help first-home buyers enter the property market by offering “competitive products and services including a 2 and 3-year 2.99 fixed rate for new and existing customers”.

Applicants must have a taxable income of no more than $125,000 for singles and up to $200,000 for couples.

Home Loan Experts’ managing director Otto Dargan said borrowers should carefully consider which lender they choose when applying for the scheme.

“We’re expecting there to be a rush to secure a place and so if their lender is slow they may miss out,” he said.

Financial services’ firm Canstar’s spokesman Steve Mickenbecker said the scheme would “allow borrowers to get into the property market sooner without the high cost of lenders’ mortgage insurance”.

But he warned a larger loan “will mean higher repayments and more interest paid over the life of the loan”.

[e-mail]

@sophieelsworth