Westpac misses cut for first-home loans scheme; CBA, NAB tapped

Westpac misses initial call-up of banks to service the federal government’s first-home loan scheme.

Those applying for the scheme will need to meet eligibility criteria, including income and purchase price caps.

Westpac has been left out of the initial tranche of the banks called in to service the federal government’s first home loan scheme, with the Commonwealth Bank and NAB confirmed as the two majors among a slew of lenders tapped by the federal government.

The choice of banks for scheme, announced by the Morrison government to help alleviate affordability problems, is another blow for Westpac, as directors of the embattled financial bank face angry shareholders on Thursday morning at its annual general meeting in Sydney.

Westpac insiders told The Australian in November the major bank was out of the running to participate in the scheme as National Housing Finance and Investment Corporation was concerned about the reputational impact of its inclusion in the scheme.

Westpac is alleged to have breached anti-money laundering laws 23 million times, with legal action from the financial crimes regulator forcing chief executive Brian Hartzer to stand down and chairman Lindsay Maxsted into early retirement.

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The housing scheme, announced in the final days of the federal election campaign in May, was designed to be an affordability incentive. First home buyers will only need a 5 per cent deposit to make a property purchase, with the government guaranteeing the remaining 15 per cent.

Up to 10,000 Australian first home buyers will have a choice between 27 lenders when the scheme becomes active on January 1, 2020.

The list of 25 smaller institutions, which includes QBANK, CUA and Bendigo Bank, was pulled together by the federal government’s bond aggregate to NHFIC to encourage competitiveness and provide geographic reach.

A minimum of 50 per cent of the 10,000 loans will be given through the minor lenders as part of the NHFIC’s investment mandate. These loans will not be available until February 1, 2020.

All approved lenders have committed to charging eligible customers the standard interest rate.

Those applying for the scheme will need to meet eligibility criteria, including income and purchase price caps. Eligible singles will be allowed a taxable incomes up to $125,000 per annum, while couples are capped at $200,000 per annum.

The price of property is dependent on the market, with Sydney limited to homes under $700,000 and $600,000 in Melbourne, while the threshold in the ACT is set at $500,000.

In the past year, about 110,000 Australians were estimated to have bought their first home — the highest level since 2009.