Trending Financial News 6 Jan 2020

First home loan guarantee scheme underway

Eligible first home buyers can now apply for guarantees under the Australian Government’s new First Home Loan Deposit Scheme.

The Scheme helps approved and accepted applicants purchase a first home sooner by providing a government guarantee to lenders to partially offset the need for a deposit. 27 lenders are participating in the First Home Loan Deposit Scheme.

The two major bank participating lenders, the National Australia Bank (NAB) and the Commonwealth Bank of Australia (CBA), are the first lenders up and running with the scheme and are offering guaranteed loans from the Scheme’s commencement date of 1 January 2020.

The other 25 non-major lenders will begin offering guaranteed loans from 1 February 2020.

How to apply for the First Home Loan Deposit Scheme

The Australian Government’s new First Home Loan Deposit Scheme is now open for applications from eligible first home buyer single people or couples.

Before applying for the the First Home Loan Deposit Scheme, check the price limits and income thresholds for the scheme.

To make an application for a guaranteed home loan under the First Home Loan Deposit Scheme, you must contact the lender directly. The only lenders currently offering guaranteed loans under the scheme are Commonwealth Bank and NAB. Other lenders will soon join the scheme.

How to find a home loan under the First Home Loan Deposit Scheme.

Links to First Home Loan Deposit Scheme home loan application pages are below.

Only CBA and NAB are offering loans under the First Home Loan Deposit Scheme in January 2020. Other lenders will join the scheme in February.

You can compare 1800 home loans from 145 lenders and financial institutions in Australia at InfoChoice.

To apply for a guaranteed first home loan, check out Commonwealth Bank’s First Home Loan Deposit Scheme application page and NAB’s First Home Loan Deposit Scheme application page.

Full list of First Home Loan Deposit Scheme lenders

This is the full list of all lenders who are offering guaranteed home loans under the Australian government’s First Home Loan Deposit Scheme.

Major bank lenders:

National Australia Bank
Commonwealth Bank of Australia

Non-major lenders:

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

Compare 1800 home loans from Australian lenders at InfoChoice.

Aussies are saving more

Australians are saving 36 per cent more in 2019 than they were five years ago, according to new research by ANZ and Roy Morgan.

And the financial wellbeing of Australians is better as a result, a prolonged period of low wage growth.

Saving and less credit card borrowing drove the ANZ Roy Morgan Financial Wellbeing Indicator up from 57.4 to 59.7 over five years.

More active saving and less credit card borrowing are the major reasons behind the improvement according to Roy Morgan.

Mean savings for Australian households have increased from $29,430 in 2014 to $42,208 in 2019. The research is based on a survey of over 75,000 Australians conducted over five years.

Compare savings accounts from Australia’s banks and other institutions at InfoChoice.

Australians are managing credit cards better than ever before 

What is the average credit card balance now?

The average Australian unpaid credit card balance has decreased from $1,402 in 2014 to $1,239 in June 2019 according to new research by ANZ and Roy Morgan.

Some Australians have given up their credit cards and have turned to debit cards for daily spending. The number of Australians with Visa and Mastercard debit cards has increased 30 per cent over five years to 62.5 per cent.

Compare credit cards from Australia’s banks and other credit card issuers at InfoChoice.

What is financial resilience?

Financial resilience is the ability to meet expenses and manage financial responsibilities without too much stress or poverty!

Australians are getting better at managing their money according to significant new research based on 75,000 Australians from ANZ and Roy Morgan.

Since 2014, the proportion of Australians “meeting everyday commitments” increased from 67.5 per cent in 2014 to 70.7 per cent in 2019.

55.3 per cent now say they feel comfortable, up from 54.1 per cent in 2014.

ANZ’s Alexis George welcomed the report and said: “We are encouraged to see Australians are generally meeting more of their daily financial commitments and are more financially resilient than they were five years ago.”

What did Australians do with their tax cut?

Many Australian taxpayers received a tax credit in 2019, often totalling more than $1,000.

Many Australians chose to save their tax refund instead of spending it. And why not? Because there are some great savings accounts and term deposits now available from banks and other institutions.

Westpac chief economist Bill Evans said household disposable income is up in late 2019 largely due to a 6.8 per cent fall in tax paid and a 2.5 per cent fall in interest paid, reported Mortgage Business. 

The rate of saving also rose said Mr Evans, which is “convincing evidence that uncertain households chose to ‘save’ the tax and interest rate cuts, and then some.”

Interest-Only vs Principal & Interest 

Interest-only home loans are often popular with investors and also with first home buyers and other looking for cheap affordable repayments. Interest-only home loans are riskier for lenders and may come with a higher interest rate. Data from from AMP Bank in 2019 shows that many interest-only home loan borrowers have switched to interest-only loans.

AMP Bank revealed a 14 per cent increase in the number of home loan customers switching from interest-only (IO) to principal and interest (P&I) loans in mid-2019.

Property investment expert Daniel Walsh told Mortgage Business that highlighted that property investors are increasingly paying down their principal and paying off debts.

Compare interest-only and principal & interest home loans at InfoChoice.

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