The Commonwealth Bank of Australia (CBA) has announced that it has now facilitated 1,000 first home buyers in the purchase of their first home under the government’s First Home Loan Deposit Scheme (FHLDS).
The 1,000th purchaser, a 32-year-old woman from Victoria, stated 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.
CBA extends purchase deadline
In response to the COVID-19 pandemic, the major bank announced earlier this month that customers who have reserved a place under the FHLDS will be eligible to extend the deadline to find a property and enter a contract of sale for a further 90 days.
This will give customers a total of six months to find a property while knowing their place in the scheme is reserved.
Commenting on the challenging market conditions and CBA’s participation in the scheme, CBA’s group executive of retail banking services, Angus Sullivan, said: “There is a lot of interest and uncertainty about the impact the coronavirus will have on the Australian property market, so it’s encouraging that we have crossed this exciting milestone in the current environment.”
He noted: “We also realise that some customers are looking for support during this difficult period, and we have a range of measures to assist them, including deferring repayments and reducing repayments to free up cash.”