Government extends support to First Home Loan Deposit Scheme applicants amid coronavirus auction ban

By Katherine O'Chee · · 2 min read
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The Federal Government has extended the loan approval period for first home buyers under the First Home Loan Deposit Scheme as coronavirus shutdowns bring new challenges to finding a property. 

Successful applicants were previously required to snag a property within 90 days of approval. But the National Housing Finance and Investment Corporation (NHFIC) yesterday announced that the 27 participating lenders can now give these borrowers another 90 days (or three months), given that they are still eligible and meet the bank’s lending criteria. 

This decision comes after further social distancing measures introduced last week included a ban on on-site real estate auctions. As a result, 40% of auctions across the country were pulled from the market, while preliminary auction clearance rates plummeted to 51.4% - the lowest level since June 2019. 

“The option to extend the 90 day pre-approval period gives both scheme lenders and first home buyers the flexibility and support to deal with the evolving COVID-19 situation,” NHFIC Chief Executive, Nathan Dal Bon said. 

As of late March, over 4,700 of the 7,661 approved applicants have still yet to find a home.

RELATED ARTICLE: Virtual home buying is officially a thing! Here’s how it works

What is the First Home Loan Deposit Scheme? 

The First Home Loan Deposit Scheme, launched in January this year, allows eligible first home buyers to borrow from participating lenders with as little as a 5% deposit, while dodging the cost of Lenders Mortgage Insurance (LMI). This is thanks to the government’s guarantee of the remaining 15% deposit requirement. 

Among the participating lenders are big banks NAB and Commonwealth Bank. 

Around 2,000 more spots remain open in the current financial year, with an additional 10,000 places set to become available from July 2020, according to the NHFIC. 

But with economic conditions worsening in light of COVID-19 and the RBA predicting that the current period of disruption could continue to the latter part of the year, it’s expected the takeup of those places may not be as enthusiastic as the first round. 

For more information, check out our comprehensive guide on the First Home Loan Deposit Scheme. Or scroll down below for a list of loan options for first home buyers.

Home loan comparisons on Mozo

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Last updated 27 July 2024 Important disclosures and comparison rate warning*

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    Initial monthly repayment
    $4,747
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  • OMG Home Loan

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    BCU Bank’s OMG owner occupied home loan offers a variety of great low rates depending on your deposit. Save with no ongoing annual fees. Access your extra payments when you need to through the redraw facility. Pre-approval valid for 3 months.

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    Fixed 3 years
    Comparison rate
    7.09 % p.a.
    Initial monthly repayment
    $4,540
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    Get a flexible loan structure with up to six loan accounts with different rate types. Make free extra repayments. Enjoy free redraw facility. No upfront or ongoing fees. Option to earn Qantas points.

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    • Fixed
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    • LVR 80-95%
    Interest rate
    6.75 % p.a.
    Fixed 3 years
    Comparison rate
    7.30 % p.a.
    Initial monthly repayment
    $4,540
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  • Special Real Deal Home Loan

    • Owner Occupier
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    Initial monthly repayment
    $4,582
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    Refinancers or first home buyers pay no monthly or annual fees. Up to $3,000 cashback when you complete your home loan application online. $2,000 cashback on loans ≥$250K; or $3,000 cashback on loans ≥$500K. LVR ≤80%. T&Cs and credit criteria apply.

  • Basic Home Loan

    • Owner Occupier
    • LVR 90-95%
    • Principal & Interest
    Interest rate
    7.19 % p.a.
    Variable
    Comparison rate
    7.22 % p.a.
    Initial monthly repayment
    $4,747
    Go to site

  • Offset Home Loan

    • Owner Occupier
    • LVR 90-95%
    • Principal & Interest
    Interest rate
    7.19 % p.a.
    Variable
    Comparison rate
    7.43 % p.a.
    Initial monthly repayment
    $4,747
    Go to site

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* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

** Initial monthly repayment figures are estimates only, based on the advertised rate. You can change the loan amount and term in the input boxes at the top of this table. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

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