Long first-home buyer waitlists at NAB and Commonwealth Bank: How you can beat them
Aussies racing to secure a place in the First Home Loan Deposit Scheme now face possible disappointment with NAB or CommBank. Here’s how you can beat the queue.
Money
Don't miss out on the headlines from Money. Followed categories will be added to My News.
Australians eager to get a foot on the property ladder have been urged to bypass the big banks in order to secure a highly-sought First Home Loan Deposit Scheme place.
It comes as the two major lenders involved in the Scheme, the Commonwealth Bank and NAB, told News Corp they have introduced waitlists to manage soaring demand. The two banks offer 5000 FHLDS places collectively, with the remaining 5000 split between 25 smaller lenders.
But Australia’s biggest lender said it was working through a “long list of customers” on its waitlist, including some who had joined the queue in the previous financial year.
“While we are still accepting new requests, as a result of this (increased) demand, we are prioritising providing places to customers on our waitlist,” a Commonwealth Bank spokesperson told News Corp.
NAB said it has recently introduced a waitlist to better manage homebuying hopefuls. The bank said once conditional approval was granted, a FHLDS spot would be offered if places remained.
“We’ve seen really strong demand for the second round of places, just as we did when the Scheme launched in January. First home buyers have remained active despite coronavirus restrictions being put in place across the country in recent months,” NAB’s Home Ownership Executive, Andy Kerr said.
“While places are limited, some remain available for the second round and we will be quickly progressing first home buyers on our waitlist into a confirmed spot as soon as possible.”
Neither the Commonwealth Bank or NAB would confirm how many places they had filled in the new financial year to date, nor how long someone would have to wait on their lists if they were to apply today.
The FHLDS allows first-time buyers to purchase a home with deposit of as little as 5 per cent and avoid costly lenders mortgage insurance.
Buyers have 10 days to obtain pre-approval for a loan once they have registered for the scheme, and then 90 days to find a property and enter a contract of sale. If they do not make the deadline, their offer expires and they can reapply.
However, since the onset of the COVID-19 pandemic, some purchasers may now be eligible for an extension.
Following the release of another 10,000 FHLDS places from July 1, new figures from the National Housing and Investment Corporation show that more than 4000 are currently on hold. This means they are reserved or finance pre-approved while the buyer searches for a home.
However, there are ways first-home buyers can get a FHLDS place faster if they’re willing to look beyond the two major banks involved in the Scheme.
“MyState Bank and Bank Australia are among lenders we know currently have scheme places available without a wait list,” David Hyman, CEO of mortgage broker Lendi, said.
“Across the lenders on the panel, interest rates under the scheme range from the low four’s on variable rates to the low two’s on fixed rates. Border Bank, Bank of Us, G&C Mutual, Heritage Isle and The Mutual are all offering competitive variable rates under 2.8 per cent for first home buyers in the scheme at the moment.”
Mr Hyman said according to advice Lendi had recently received, the Commonwealth Bank and NAB “may not be able to respond to requests for new places under the scheme at this point in time”.
The coronavirus pandemic did not appear to have deterred first-home buyers, Mr Hyman said.
“From what we’ve seen, first home buyers haven’t been deterred by COVID-19. Rather they are motivated by the grants, incentives and the low interest rate environment,” he said.
“In fact, we had 30 per cent more new first-home buying customers coming to us in July, compared to March this year.”
Housing Minister Michael Sukkar said the FHLDS was helping first-home buyers purchase a property faster.
“The Scheme has been vital in driving first home buyer confidence despite COVID-19. The data shows this confidence is being maintained as this financial year’s allocation of guarantees being enthusiastically secured,” Mr Sukkar said.
‘THERE WAS MORE OPPORTUNITY’
Michael Farrant said the First Home Loan Deposit Scheme had allowed him to find a home in a suburb he thought was out of his reach.
But when it came to came to securing a FHLDS place, he was warned by his mortgage broker that he may face a lengthy wait if he sought one through NAB or the Commonwealth Bank.
Instead, the 25-year-old business owner secured a spot through Teachers MutualBank.
Mr Farrant managed to buy a $530,000, two-bedroom unit in Essendon — about 10kms north of Melbourne’s CBD — which he settled on in June.
Having secured a home loan at a 2.14 per cent fixed rate for two years, Mr Farrant said he couldn’t be happier.
“There was more opportunity to be pushed through the system with the smaller lenders that are a part of the Scheme,” Mr Farrant said.
By using the FHLDS, he has saved about $14,000 because he is not required to pay lenders mortgage insurance.