The vast majority of applications for the First Home Loan Deposit Scheme submitted to a WA-based bank came through brokers, it has been revealed.
P&N Bank has revealed that it has helped over 50 Western Australian customers achieve their goal of entering the property market since joining the First Home Loan Deposit Scheme (FHLDS) in February – with the broker channel largely driving applications.
The FHLDS allows eligible first home buyers to purchase a home with a deposit of as little as 5 per cent, without needing to pay for lender’s mortgage insurance (LMI), both of which can be a barrier for those entering the property market.
The fact that brokers led the charge goes against the general trend for FHLDS applications after initial data showed that 50 per cent of loan applications lodged under the scheme had been originated in the branches of participating lenders, with only 29 per cent of secured places under the scheme introduced via the third-party channel, well below the current market share of broker-originated loans of around 55 per cent.
Speaking of the figures, P&N Bank senior manager, retail distribution, Kaine Adamson said: “Through the scheme, the usual barriers have been removed, so more Western Australians now have the opportunity to enter the housing market – and our property market also benefits,” Mr Adamson said.
“To date, we have seen approximately 80 per cent of applications for this scheme come in via our valued broker partnerships, and we look forward to helping more of our brokers assist their clients purchase their first home.
“First home buyers now make up 24 per cent of all new owner-occupied borrowings at P&N, up from 14 per cent since we joined the scheme, which clearly shows the positive impact the FHLDS is having.”
General manager of WA-based brokerage Peard Finance, Paul Hamilton, commented: “After becoming more familiar with P&N’s policies and products, and following the introduction of the FHLDS, I’m seeing an increase in the number of customers I am assisting to make applications in the past couple of months.
“With so much pressure on household budgets after COVID-19, it is critical that this program is expanded in 2019-20, as it allows first home buyers to enter the market with a low deposit and avoid thousands in LMI costs.”
[Related: FHB scheme sparks lending bounce in January]