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

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.

Compare first home loans - last updated 13 August 2022

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  • PAYG Home Loan

    Owner Occupier, Principal & Interest, LVR<80%

    interest rate
    comparison rate
    Initial monthly repayment
    3.29% p.a. variable
    3.33% p.a.

    Low variable rate. Ideal for new home buyers or refinancers. Unlimited additional repayments. Unlimited free redraw. Application completely online. Optional 100% offset can be added for $120 p.a.. 20% deposit required.

  • Smart Booster Home Loan

    1 Year Discounted Variable Rate, Owner Occupier, Principal & Interest, <80% LVR

    interest rate
    comparison rate
    Initial monthly repayment
    3.74% p.a.variable for 12 months and then 4.23% p.a. variable
    4.22% p.a.

    Already includes July RBA rate increase. No monthly or ongoing fees. has some of the fastest settlement times on the market. They can meet 30-day settlement timeline so you can start saving thousands, as soon as possible! Mozo award-winning online lender, friendly and local Australian based team.

  • First Home Buyer Loan

    Owner Occupier, Principal & Interest

    interest rate
    comparison rate
    Initial monthly repayment
    4.14% p.a. variable
    4.17% p.a.

    A low variable rate loan for home buyers. No establishment or ongoing fees to pay. 100% offset account included. Allows for unlimited repayments, redraws and flexible repayment options.

  • Variable Home Loan

    <80% LVR, Owner Occupier, Interest Only

    interest rate
    comparison rate
    Initial monthly repayment
    4.74% p.a. variable
    4.19% p.a.

    Fast online application with no fees. Free extra repayments and redraw facility. Min 20% deposit.


* 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, loan amount and term entered. 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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