First-home buyers rush in for loan scheme

The government’s new housing scheme for first-home buyers has attracted strong interest from prospective borrowers.

Stockland chief executive Mark Steinert Picture: Jane Dempster

The federal government’s new housing scheme for first-home buyers has attracted strong interest from prospective borrowers ahead of its release.

Launching on Wednesday, the scheme is designed to help first-home buyers purchase a home and will be offered through 27 lenders, including Commonwealth Bank and National Australia Bank.

Commonwealth Bank group executive Angus Sullivan said the bank had received a surge in inquiries from potential first-home loan customers.

“Since it was announced that we would be joining the scheme, we have received thousands of inquiries from customers in both metropolitan and regional areas, and have booked in hundreds of appointments with interested customers,” Mr Sullivan said in a statement.

He said saving for a home deposit could be challenging and that CBA supported the National Housing Finance and Investment Corporation.

Under the scheme, eligible home buyers, who earned less than $200,000 per couple in the previous financial year, or singles earning less than $125,000, could apply for guarantees that meant they would not have to pay lender’s mortgage insurance, which can be as high as $10,000.

The benefactors of the scheme, which will provide 10,000 loans to first-time home buyers each financial year, must have saved between 5 per cent and 20 per cent of the home’s purchase price.

The scheme is also being ­offered through 25 non-major lenders, including Bendigo Bank, the Queensland Country Credit Union and CUA.

Stockland chief executive and managing director Mark Steinert said the scheme would mean an increase of up to 10 per cent in the number of first-home buyers per year, which he said was material.

“It’s more likely to affect existing properties and certainly does help when you are borrowing more than 90 per cent and you don’t have to pay mortgage insurance, which is normally thousands of dollars a year,” Mr Steinert said on Tuesday.

He said the mandatory price thresholds for entry-level properties for first-home buyers were not unreasonable.

“You can certainly buy entry-level house and land packages in our communities across Australia,” he said. “It’s a sensible strategy and a good policy for first-home buyers. It’s a good start.”

The mandatory price thresholds for houses and apartments include $700,000 for Sydney, $600,000 in Melbourne and regional centres such as Geelong and $375,000 in other parts of Victoria.

Finding a house or apartment valued at less than $700,000 close to the Sydney CBD could be difficult with properties in that price range mainly limited to apartments in the western and outer-western suburbs.

On Queensland’s Gold Coast the top price threshold is $475,000, the same as in Brisbane and on the Sunshine Coast.

In Adelaide, the price threshold is $400,000, which is the same cap as Hobart. In Canberra, the price threshold is $500,000.

Non-major lenders will receive no less than 50 per cent of the initial 10,000 guarantees allocated in the current financial year.

All participating lenders are supporting the scheme by committing to not charging eligible customers higher interest rates than equivalent customers outside of the scheme.