NAB to implement First Home Loan Deposit Scheme

author-avatar By on November 26, 2019
NAB to implement First Home Loan Deposit Scheme

Image source: NAB Twitter

NAB has been announced as the first of two major lenders to offer mortgages under the Federal Government’s First Home Loan Deposit Scheme.

The scheme, which was first announced in May, will allow eligible first home buyers to enter the market with a deposit as low as 5% under a special government guarantee.

NAB was selected by the National Housing Finance and Investment Corporation (NHFIC) to take part in the scheme, who said it had received a “strong response” from other lenders.

According to NAB, the bank will get access to up to half of the 10,000 eligible first home buyers per financial year, and say they “will not charge eligible customers higher interest rates than equivalent customers outside of the Scheme”.

Former NSW Premier, now NAB Chief Customer Officer – Consumer Banking, Mike Baird said the scheme could save borrowers thousands.

“We are proud to be chosen to partner with the Federal Government and NHFIC on the First Home Loan Deposit Scheme,” Mr Baird said.

“Every year our bankers help more than 15,000 Australians achieve their dream of owning their first home. This Scheme is a fantastic way of helping even more customers, allowing them to potentially save thousands of dollars on their mortgage.”

Since March 2017, NAB has been the only major bank to have a special rate for first home buyers, with the rate currently at 2.88% p.a. (4.34% p.a. comp rate*) fixed for two years.

NAB will be part of a panel of lenders, including one other major bank and smaller lenders, said to be finalised by mid-next month.

The NHFIC said lenders on the panel will be chosen “based on the competitiveness of their home loan offering, geographic reach, and readiness to meet Scheme implementation timelines”.

Housing Minister Michael Sukkar previously said only two of the big four banks will be chosen to take part in the Scheme, with 50% of guarantees to be issued to smaller lenders.

“These rules are designed to ensure the Government’s expectation that smaller lenders play a significant role in the First Home Loan Deposit Scheme to boost competition is met,” Mr Sukkar said.

The Scheme will be operational from 1 January 2020 on a first in, best-dressed basis for up to 10,000 eligible first home buyers each year.

Applicants will be subject to an income threshold of up to $125,000 for singles, and a combined income of $200,000 for couples if it’s their first home loan and they are both first home buyers.

Property price caps will also apply under the Scheme, with properties in Sydney limited to $700,000, and $600,000 in Melbourne.

Once the Scheme kicks off, applications will be lodged directly through participating lenders and their brokers.

Looking for a low-rate variable home loan? The table below displays a selection of variable-rate home loans on offer, featuring a low-rate pick from each of the following three categories: the big four banks, the top 10 customer-owned banks, and the larger non-banks.

Lender
Advertised rate Comparison rate Monthly repayment Rate TypeOffsetRedrawOngoing FeeUpfront FeesLVRLump Sum RepaymentAdditional RepaymentsPre-approval
VariableMore details
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
VariableMore details
AN EASY ONLINE APPLICATION

Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)

  • Unlimited additional repayments
  • Unlimited free redraws
  • Optional 100% offset can be added for $120 p.a.^
AN EASY ONLINE APPLICATION

Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)

  • Unlimited additional repayments
  • Unlimited free redraws
  • Optional 100% offset can be added for $120 p.a.^
FixedMore details
NO UPFRONT OR ONGOING FEES

Basic Home Loan Fixed (Principal and Interest) (LVR < 70%) 3 Years

NO UPFRONT OR ONGOING FEES

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. Rates correct as of September 28, 2021. View disclaimer.


Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:

  • The big four banks are: ANZ, CBA, NAB and Westpac
  • The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2020. They are (in descending order): Great Southern Bank, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
  • The larger non-bank lenders are those who (in 2020) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.
  • If you click on a product link and you are referred to a Product or Service Provider’s web page, it is highly likely that a commercial relationship exists between that Product or Service Provider and Savings.com.au

Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site.

In the interests of full disclosure, Savings.com.au, Performance Drive and Loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.

*Comparison rate is based on a loan of $150,000 over a term of 25 years. Please note the comparison rate only applies to the examples given. Different loan amounts and terms will result in different comparison rates. Costs such as redraw fees and costs savings, such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.

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Emma Duffy is Assistant Editor at Your Mortgage and  Your Investment Property Mag, which are part of the Savings Media Group. In this role, she manages a team of journalists and expert contributors committed to keeping readers informed about the latest home loan and finance news and trends, as well as providing in-depth property guides. She is also a finance journalist at Savings.com.au which she joined shortly after its launch in early 2019. Emma has a Bachelor in Journalism and has been published in several other publications and been featured on radio.

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