CBA joins new loan offer
themercury.com.au
ASPIRING first-home buyers will have dozens of lenders to choose from under the Federal Government’s new scheme to help borrowers get a foot on the property ladder sooner.
The nation’s biggest bank, the Commonwealth Bank, is the second major lender to be given the green light to offer loans from January 1 under the
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First Home Loan Deposit Scheme. It joins National Australia Bank and another 25 non-bank lenders in offering these loans
The scheme enables borrowers with deposits of just 5 per cent to be given a special government guarantee which allows them to avoid expensive lenders’ mortgage insurance.
Borrowers who do not have a 20 per cent deposit are hit with an LMI charge which costs thousands of dollars.
According to Genworth’s LMI calculator, a customer with a $400,000 loan and a 5 per cent deposit would pay $12,800 in LMI costs.
This is designed to protect the lender — not the borrower — if there is a default on the loan.
The National Housing Finance and Investment Corporation
yesterday confirmed the 27 lenders would be part of the scheme from next month.
The participating banks other than CBA and NAB include Australian Military Bank, Auswide Bank, Bank Australia, Bank First, Bank of Us, Bendigo Bank, Beyond Bank Australia, Community First Credit Union, CUA, Defence Bank, Gateway Bank, G&C Mutual Bank, Indigenous
Business Australia, Mortgageport, MyState Bank, People’s Choice Credit Union, Police Bank, P&N Bank, QBANK, Queensland Country Credit Union, Regional Australia Bank, Sydney Mutual Bank and Endeavour Bank, Teachers Mutual Bank Limited, The Mutual Bank and WAW Credit Union.
All lenders involved in the scheme said they would not charge higher interest rates to successful applicants using the scheme.
The non-bank lenders also will receive no less than 50 per cent of the 10,000 guarantees allocated each financial year to ensure the big two banks don’t dominate the scheme.
Applicants must have a taxable income of no more than $125,000 for singles and up to $200,000 for couples.