First home buyer scheme working well

The federal government’s First Home Loan Deposit Scheme has supported a large number of responsible buyers to enter the market ahead with ultra-low deposits, according to a new report from the National Housing Finance & Investment Corporation.

Since the First Home Loan Deposit Scheme was introduced in January 2020, about 40,000 first home buyers have been supported, and just 0.04% are behind on their mortgage.

That compares to an arrears rate of 0.13% in the broader lender’s mortgage insurance market – i.e. the pool of other borrowers who have low-deposit loans.

“Many participants are likely leveraging the bring-forward of their home purchase and successfully transitioning out of the scheme into the broader home ownership market, with over 1,400 participants refinancing their mortgage out of the scheme at the time of writing this report.”

An increasing number of first home buyers are turning to mortgage brokers for support.

Since the scheme started, the share of loans originated by mortgage brokers has jumped from 46% in 2019-20 to 72% in 2021–22.