MyState selected for Australian Government’s First Home Loan Deposit Scheme
First published on December 12, 2019
MyState Limited (ASX:MYS), the banking and wealth management group, today announced that MyState Bank has been chosen by the National Housing Finance and Investment Corporation (NHFIC) to join the lending panel for the Australian Government’s new First Home Loan Deposit Scheme.
MyState’s Managing Director and CEO, Melos Sulicich, said, “As a smaller bank with many customers who are owner-occupier, first home buyers, we’re delighted to be amongst the first to offer eligible customers borrowing facilities under the scheme. This demonstrates our competitiveness and fulfils our purpose as a bank to help people to achieve their dreams.
“The Scheme enables first home buyers to get into the housing market much earlier, allowing customers to own their own home with a deposit as low as 5%. The customers do not need lenders mortgage insurance and this is a huge benefit which may save them many thousands of dollars over the life of a loan.”
Home buyers usually need to pay a deposit equal to at least 20% of a home’s purchase price to avoid paying lender’s mortgage insurance, which protects the lender from financial loss, but involves additional cost for the borrower.
National Housing and Finance Corporation CEO Nathan Dal Bon said: “We are delighted to have MyState Bank join the panel. We received strong interest from a broad range of smaller lenders. The panel announced today aims to provide the Scheme with geographical reach whilst promoting consumer choice and assisting first home buyers to own their first home sooner.”
From 1 February 2020, MyState Bank will offer highly competitive rates for eligible customers, including an offer of a 0.05% discount on the lowest advertised basic variable rate for home loans with a loan-to-valuation ratio (LVR) of up to 95%, with no establishment fee as well as a number of competitive fixed rate options.
The scheme will support up to 10,000 loans per financial year for eligible single first home buyer applicants earning up to $125,000 or couples earning up to $200,000 and will require a minimum deposit of 5% of the value of the property. The full eligibility criteria is available on the NHFIC’s website. Loans can be used for purchase of land to construct a house, and price caps apply depending on the location of the property. In addition, First Home Buyers may also be able to apply for state-based first home owner grants.
MyState will accept applications under the federal government’s scheme from 1 February 2020.