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.
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