Major bank selected for FHB scheme

by Madison Utley27 Nov 2019

A major bank has announced it will be taking part in the government’s first home loan deposit scheme, operational from 1 January 2020.

NAB has been selected by the National Housing Finance and Investment Corporation (NHFIC) to offer mortgages under the scheme.

“We are proud to be chosen to partner with the federal government and NHFIC,” said Mike Baird, NAB chief customer officer of consumer banking.

“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.”

The scheme will provide 10,000 eligible Australians per year access to a home loan with a deposit of as little as 5%. To implement the scheme, the NHFIC will contract with a panel of selected lenders rather than having direct contact with borrowers.

Before offering the guaranteed loans, lenders will need to update their internal systems and train front-line lending staff on how to apply the scheme eligibility criteria alongside regular considerations, such as loan serviceability.

The NHFIC has communicated key considerations in its selection of lender partners includes the loan products on offer, including interest rates and other fees, as well as the quality of the customer experience.

According to Baird, NAB is the only major to have a special rate for first homebuyers, which is currently 2.88% fixed for two years. The major bank also emphasised it will not charge eligible customers higher interest rates than equivalent customers outside of the scheme.

“We see this appointment as a great endorsement of NAB’s home loan offering and our support of Australians looking to buy their own home for the first time,” said Baird.

Before the scheme is live in the new year, customers are able to check their potential eligibility on the NHFIC website.