Over 1,000 Australian first-time buyers have already purchased homes this year under the Federal Government’s First Home Loan Deposit Scheme (FHLDS) using a customer owned bank.
That’s according to new figures released by peak body COBA (the Customer Owned Banking Association), which show that 1,150 first home buyers have used one of their member institutions to take out a home loan as part of the initiative.
The scheme, which kicked off on January 1, allows first home buyers to purchase a property with a deposit as low as 5% without needing to pay Lenders Mortgage Insurance (LMI) - usually a requirement for low deposit mortgages.
COBA chief executive, Michael Lawrence said that the number of participants was encouraging, especially given the challenges thrown up by COVID-19 in the past few months.
“COBA is delighted by this strong performance after only three months, which includes homes that have settled or where a sale contract has been signed. Our members are also supporting many more applicants who are in the process of purchasing a property,” he said.
“Buying a house is one of the biggest decisions in life, and customer owned banking institutions are specialists at helping their customers make the right decision. They support customers at every step of the way, from initial conversations to the settlement of a property.”
Customer owned banks such as Bank Australia, Defense Bank and Gateway Bank represent 20 of the 27 lenders participating in the scheme and have a share in 5,000 of the 10,000 spots available to non-major lenders. The remaining 5,000 places are allocated to the Commonwealth Bank and NAB.
Last week, CommBank announced that 1,000 of its customers had purchased a property under the scheme, while NAB is yet to provide any figures.
First home buyers will also have access to 10,000 new spots which will open as of July 1 for the 2020/21 financial year.
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For more information about the FHLDS, including a full list of the participating members, check out our comprehensive First Home Loan Deposit Scheme guide.
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