Australia’s largest bank has announced that 1,000 first home buyers have now finalised the purchase of their home under the government’s first home buyer loan scheme, with plans to support a further 2,400 secure finances.
The First Home Loan Deposit Scheme (FHLDS) was introduced to help Australians get into a home sooner by providing secured loans for first time buyers with a deposit of just 5 per cent.
CBA announced its 1,000th purchaser, a 32-year-old woman from Victoria, stating that securing a place under the FHLDS allowed her to purchase her new Pakenham home “much sooner” than she anticipated.
“I was saving for a deposit but was a few years off buying a property, so when my lender contacted me and explained that I would be able to purchase a home much sooner by participating in the scheme, I was ecstatic.”
Additionally, the major bank announced that it has assisted a further 2,400 buyers secure their place under the scheme, bringing the total number of first home buyers to be financed by CBA under the FHLDS to 3,400.
The FHLDS aims to provide up to 10,000 first home buyers per year with access to housing finance, with a deposit as low as 5 per cent.
Under the scheme, the government has agreed to guarantee the difference between the borrower’s deposit and the 20 per cent deposit required to take out a home loan without paying lender’s mortgage insurance.
From 1 January 2020, the two majors were permitted to secure a combined 3,000 places under the scheme, with initial data suggesting that all 3,000 places were filled within the first three weeks of launch.
From 1 February 2020, the majors were allocated a further 2,000 places, and the 25 non-major participating lenders opened up applications for the remaining 5,000 places.
The second major participating lender, NAB, confirmed that all 5,000 allocated major bank-funded loans were reserved “within hours” of the second-round release of places.
Another 10,000 places under the scheme will be released on 1 July 2020, with details on allocation yet to be released.