First Home Loan Deposit Scheme: What Buyers Need To Know

The government's first home buyer loan deposit scheme finally kicked off this week. Under the scheme, 10,000 Australians will receive a government-backed home loan with as little as a 5% deposit, and no requirement to pay lenders mortgage insurance (LMI). Here's what you need to know.

In December last year, the National Housing Finance and Investment Corporation (NHFIC), a department created to manage the government’s new First Home Loan Deposit Scheme (FHLDS), announced that 27 lenders had been approved to provide guaranteed home loans to First Home Buyers (FHBs).

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FHBs have been patiently awaiting the scheme’s launch since it was announced before the Federal Election earlier this year. This is because it is the first of its kind to help eligible FHBs purchase a home with a deposit as little as 5 per cent.

Who are the 27 approved lenders?

The 27 lenders are comprised of two 'big four' lenders, and 25 non-major lenders.

The two major lenders, National Australia Bank and Commonwealth Bank, will get a head start in the application process, with approval to offer loans from 1 January 2020. The remaining 25 non-major lenders on the other hand, will be able to submit applications from 1 February 2020.

As confirmed by the NHFIC, the 27 approved Australian lenders participating in the Scheme are as follows:

  • National Australia Bank
  • Commonwealth Bank of Australia
  • 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 (including the Border Bank and Bank of Heritage Isle)
  • P&N Bank
  • QBANK
  • Queensland Country Credit Union
  • Regional Australia Bank
  • Sydney Mutual Bank and Endeavour Mutual Bank (divisions of Australian Mutual Bank Ltd)
  • Teachers Mutual Bank Limited (including Firefighters Mutual Bank, Health Professionals Bank, Teachers Mutual Bank and UniBank)
  • The Mutual Bank
  • WAW Credit Union

What rates will these lenders offer?

Rates for the guaranteed home loans will most likely be determined on an individual basis, taking into consideration the applicant's income and expenditure.

However, representative of the NHFIC, Fiona Benson has stated that “all participating lenders are supporting the Scheme by not charging eligible customers higher interest rates than equivalent customers outside of the Scheme”.

If you are looking to apply for the FHLDS, you can look at the current fixed and variable rates available on the market and begin to familiarise yourself with their current offerings.

Variable rate home loans available outside of the FHLDS

Variable rate home loans have an interest rate that can rise or fall over the term of your loan, depending on the state of the market.

Here are the lowest variable rate home loan products currently advertised by 25 of the 27 approved lenders in the First Home Loan Deposit Scheme*:

Approved Lender Lowest current variable home loan rate Advertised Rate Comparison Rate
National Australia Bank Base Variable Home Loan Special (Principal and Interest) (LVR < 80%) 3.09 3.09
CBA Extra Home Loan (Principal and Interest) (LVR < 70%) 3.22 3.23
Australian Military Bank RateSaver Home Loan (Principal and Interest) ($150k-$250k, LVR < 80%) 3.31 3.32
Bank Australia Premium Package Home Loan ($500k+, LVR < 70%) 3.18 3.55
Bank First First Rate Home Loan (First Home Buyer) (LVR < 80%) 3.19 3.2
Bank of Us FlexiDiscount Home Loan Special (LVR < 80%) 3.18 3.2
Bendigo Bank Express Home Loan (Principal and Interest) 3.14 3.31
Beyond Bank Australia Total Home Loan Package Variable (LVR < 80%) (New Customer) 3.15 3.56
Community First Credit Union Basic Variable Home Loan (Principal and Interest) (LVR < 80%) 3.75 3.82
CUA Achieve Variable Home Loan (Principal and Interest) ($500k+) 2.98 3.03
Defence Bank Premier Low Rate Home Loan 3.36 3.36
Gateway Bank Low Rate Essentials Home Loan (LVR < 80%) 3.06 3.09
G&C Mutual Bank First Home Premium Package 2.79 2.79
MyState Bank Basic Variable Home Loan (Principal and Interest) (LVR < 80%) 3.08 3.11
People's Choice Credit Union Basic Variable New Business Home Loan (LVR < 80%) 3.08 3.08
Police Bank (incl Border Bank, Bank of Heritage Isle) Goldrate Home Loan (New Customer Only) 3.18 3.26
P&N Bank Simple Home Loan 3.17 3.17
QBANK Classic Home Loan Special Offer (QLD only) (New Customer) (LVR < 90%) 3.04 3.07
Queensland Country Credit Union Ultimate Special Home Loan Package (Principal and Interest) 3.39 3.76
Regional Australia Bank Sustainable Home Loan (Principal and Interest) 3.31 3.33
Sydney Mutual / Endeavour Mutual First Home Buyer Loan - 40 Year Term (Without Offset) 3.22 3.25
Teachers Mutual (incl Firefighters Mutual, Health Professionals, Unibank)* Classic Home Loan (Intro rate 2.80% for 12 months) 3.29 3.34
The Mutual Discounted Variable Rate Home Loan (Intro rate 3.23% for 12 months) 3.73 4.09
WAW Credit Union Back to Basics Principal and Interest LVR < 80% 3.44 3.49

Fixed rate home loans available outside of the FHLDS

Fixed rate home loans have an interest rate that is fixed for a set period of time, between one and five years, and at the end of this period the loan switches a different rate.

This rate is usually higher than the original fixed rate, so be sure to check the rate it reverts to after the fixed period is up, before you apply.

Here are the lowest fixed rate home loan products currently advertised by 25 of the 27 approved lenders in the First Home Loan Deposit Scheme*:

Approved Lender Lowest current fixed home loan rate Advertised Rate Comparison Rate
National Australia Bank Choice Package Tailored Home Loan Fixed (Principal and Interest) (First Home Buyer Special) 2 Years 2.88 4.34
CBA Wealth Package Fixed Rate Home Loan (Principal and Interest) 2 years 2.99 4.47
Australian Military Bank Fixed Rate Home Loan 2 Years 3.09 4.63
Bank Australia Premium Package Home Loan Fixed 2 Years (LVR < 70%) 2.84 3.57
Bank First Premier Package Home Loan Fixed 4 Years (LVR < 80%) (Discounted) 2.99 3.7
Bank of Us Special FlexiDiscount Home Loan Fixed 2 Years (LVR < 80%) 3.18 3.37
Bendigo Bank Express Fixed Home Loan (Principal and Interest) 2 Year 2.99 3.28
Beyond Bank Australia Total Home Loan Package Home Loan Fixed Special 3 Years 2.89 4.04
Community First Credit Union Fixed Rate Home Loan (Principal and Interest) 2 Years 3.09 3.94
CUA Fixed Rate Home Loan (Principal and Interest) 3 Years 2.98 4.29
Defence Bank Ultimate Package Essential Home Loan Fixed 3 Years 2.98 4.11
Gateway Bank Premium Package Home Loan Fixed 1 Year 3.09 3.83
G&C Mutual Bank Fixed Rate Home Loan 2 Years 2.99 3.02
MyState Bank Fixed Home Loan (Principal and Interest) 3 Years (LVR < 80%) 3.19 4.42
People's Choice Credit Union Package Fixed Home Loan (Principal and Interest) (First Home Buyer) 3 year 2.89 4.04
Police Bank (incl Border Bank, Bank of Heritage Isle) Police Value Fixed Rate Home Loan 1 year (LVR < 90%) 2.79 3.22
P&N Bank Fixed Rate Home Loan 2 Years (LVR < 80%) 2.95 3.91
QBANK 3 Year Fixed Offer < 95% LVR (QLD Only) 2.94 3.77
Queensland Country Credit Union Ratesaver Fixed Rate Home Loan 3 Years 2.99 3.77
Regional Australia Bank Partnership Advantage Fixed Home Loan (Principal and Interest) 3 Years 3.29 3.66
Sydney Mutual / Endeavour Mutual Fixed Rate Home Loan 3 Years 2.99 3.29
Teachers Mutual (incl Firefighters Mutual, Health Professionals, Unibank)* Fixed Home Loan (Principal and Interest) 3 Years 2.98 4.23
The Mutual Package Home Loan Fixed 2 Years (Principal & Interest) 3.19 4.16
WAW Credit Union Fixed 1 year LVR < 80% 2.95 4.39

Indigenous Business Australia, one of the approved lenders, is a government funded organisation that enhances the economic development opportunities of Aboriginal and Torres Strait Islander people across Australia, and details of their loans can be found on their website.

Another lender, Mortgageport, does not make its rates publicly available. Therefore, both lenders have been left off the tables above.

*These rates are current as at 16 December 2019 according to the RateCity database. These rates are not indicative of the rates that will be offered as part of the First Home Loan Deposit Scheme. The lowest rates on the market do not always equate to the cheapest products as fees and charges may apply. Contact the lender directly to request a copy of the Product Disclosure Statement, before you complete any applications, as applying to multiple credit products can negatively impact your credit score.


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