NAB's FHLDS Update

NAB is pleased to continue to help first home buyers purchase their first home sooner through the First Home Loan Deposit Scheme (FHLDS).

From Wednesday 1 July 2020 NAB will again be sharing access to 5,000 Scheme places, with 1,500 Scheme places being allocated solely to NAB. They have made some changes to help improve their processes for both Brokers and Customers, including digitising the end to end process. To reserve a place in the Scheme through NAB from 1 July Brokers will now need to obtain conditional approval for their customers before we can reserve a Scheme place for them.

All Brokers who currently have customers on the NAB waitlist have now been contacted and advised of our new process. For those Broker who has a customer ready to purchase, they have been advised to proceed their customers' application to a conditional approval for a Scheme places on July 1.

An overview of our process steps are below:

  • Make sure customers are eligible for the Scheme
  • Check the NAB Broker Portal to confirm that Scheme places are available
  • Attach a copy of the customer's Medicare ID to the application
  • Enter '0000-00-00000NAB0' into the FHLDS Place ID field in AOL; and
  • Add a comment with customer's estimated taxable income for the financial year ending 30 June 2020.

The Resources tab on the Broker Portal has all the information Broker's need on the application and approval process. If Broker's would like a refresher on submitting an FHLDS application in Apply Online, they can view our video here.

Our latest offers and rates

In more good news, last week we reduced our Base Variable Rate (BVR) offer to a record low and dropped some of our fixed rates:

  • The NAB Base Variable Rate special offer has been reduced by 0.15% p.a. to 2.69% p.a. (comparison rate 2.69% p.a.), available to owner-occupiers paying principal and interest for new lending with up to 80% LVR.
  • NAB fixed rates have been reduced for both owner-occupiers and residential investors paying principal and interest. NAB Choice Package fixed rates now start at 2.19% p.a. (comparison rate 4.02% p.a.) for a two year term for owner-occupiers paying principal and interest.

With the $600 BVR application fee for new applications still being waived, now is a great time to be a first home buyer banking with NAB. Talk to your potential customers now!

*WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.

NAB's Latest Report

The key message from our latest Data Insights is the recovery in consumer spending is levelling off, with NAB's consumption spending index lower than at the same time last year and flat since the start of the year (pre-COVID 19). Payment inflows data also continues to slow. Although still mildly positive, the latest read is the slowest this year. The slowdown is particularly evident among Corporates.

  • NAB's consumption spending index points to a levelling off in spending. Over the week ending June 20, consumption spending was just 0.3% higher in 4-week moving average terms than at the start of the year and 2.7% lower than at the same time last year.
  • Relative to the start of 2020, spending is higher in just five states, led by the NT and QLD (but the rate of growth rate is tapering off in both states). Spending remains lowest in the ACT (by some margin), WA and VIC (but is improving as restrictions are slowly relaxed). Relative to last year, spending is lower in all states bar the NT and QLD (flat).
  • By industry, the recovery in Hospitality spend is continuing, with positive signs in all industry sub-sectors. But spending is still down 31% since the start of the year and among the worst performers, along with Admin & Support (-73%) and Transport, Postage & Warehousing (-43%). Construction (39%), Professional & Tech Services (25%) and Retail (12%) have recorded the highest growth since the start of 2020 but appears to be levelling off in all three sectors. Healthcare is among the big improvers, with spending now up some 4% since the start of the year.
  • The softening in consumer spend further evident in the fact that spending growth over the year is now positive in just 13 of 45 industry sub-sectors (16 in our last report) - led by Gambling (105%) and Residential Care Services (38%). Heavy falls are still being reported for Motion Picture & Sound Recording (-95%), Air & Space Transport (-85%), Rail Transport (-80%) and Admin & Support (-77%).
  • Payment Inflows into NAB merchants are also slowing, with the latest data showing inflows now just 2.1% higher in the year on year terms in the week ending on June 20 - the weakest result this year. Inflows are down most for small firms, but the rate of decline has levelled off in recent weeks while accelerating for mid-sized firms. Corporates are still positive and out-performing, but inflows are slowing quickly.
  • Inflows were most robust into Other Services (34%), Mining (18%), Manufacturing (14%) and Construction (13%), and weakest in Hospitality (-30%), and Transport Postal & Warehousing (-15.9%).

For further details, please see the attached report.

Teachers Mutual Bank Update

The Bank is pleased to advise that it will be participating in the second release of the Australian Government's First Home Loan Deposit Scheme with new placements set to be released Wednesday 1st July 2020 and will be available across all our divisions;

  • Firefighters Mutual Bank
  • Health Professionals Bank
  • Teachers Mutual Bank
  • UniBank

IMPORTANT:

  • The bank will not accept any applications that do not meet or are not provided with at the time of submission, all the required NHFIC criteria which include, but not limited to, the provision of the 2020 ATO Notice of Assessment for all borrowers.
  • A new First Home Buyer Declaration is also required (attached for your reference) and will be available on the Broker Portal
  • Borrowers still need to meet ALL TMBL lending criteria.
  • NHFIC requirements are additional to current TMBL lending criteria. Refer to the NHFIC website for further information.

FHLDS Teachers Mutual Bank

Please also find attached the First Home Buyers declaration form which is required to be completed & submit with every application.

Second Tranche of FHLDS

The government has agreed to guarantee the difference between the borrower's deposit and the standard 20 per cent deposit required to take out a home loan without paying lender's mortgage insurance. The scheme first launched in January of this year, with 10,000 places being made available for the six-month period Jan-June 2020.

A further 10,000 places have now been made available for the 2020-21 financial year.

Speaking of the launch of the second tranche, NHFIC CEO Nathan Dal Bon said: "To date, we've seen the widespread appeal of the scheme across all states and territories, including regional and metro areas.

"Notwithstanding the current challenges posed by COVID-19, we anticipate that there will be continued demand for these new 10,000 places."

First home buyers can check their eligibility and apply for one of the 10,000 scheme places for the 2020-21 financial year through the panel of 27 participating lenders.

Applications from 1 July will require a 2019-20 Notice of Assessment from the Australian Taxation Office to demonstrate that their taxable income is no more than $125,000 for individuals and $200,000 for couples.

Source: Mortgage Business

HomeBuilder Scheme Study

A study by CoreLogic found 10 regions where a huge number of properties can qualify under the federal government's HomeBuilder scheme.

The HomeBuilder scheme aims to provide a $25,000 incentive to eligible Australians who are constructing a new home or are planning to start a renovation project.

The CoreLogic study focused on the renovation component of the scheme and found that Melbourne's South East region, which spans from Mount Waverley to Bunyip, has the highest number of properties eligible for the grant.

For a property to be qualified for the renovation component of the scheme, it has to have a median value below $1.5m. Furthermore, the renovation project to be carried out in the property should be worth between $150,000 to $750,000.

Elizabeth Owen, head of residential research at CoreLogic, said the eligibility criteria, particularly for renovations, might affect the interest of potential applicants. "For areas where dwelling prices and incomes are relatively low, this may lead to owners over-capitalising on renovations, where they cannot recoup the cost of upgrades to the property," she said.

Owen said the scheme might have a limited impact on the delivery of new construction work, given its reliance on the decisions of potential applicants to purchase and renovate a property in a highly uncertain economic climate. It will, however, be beneficial to those who are already planning to renovate prior to the COVID-19 outbreak.

"The kind of planning and financing that needs to be organised for a six-figure renovation means that it would largely be taken up by those who have already started the process," she said. "Similarly, for homeowners, and first home buyers in particular, those looking to commit to a property purchase within the next six months would already have been saving a deposit and primed to buy."

Online Credit Policy Update

As part of Bluestone's winter campaign, they have launched its Online Credit Policy on Wednesday 24 June.

Our Online Credit Policy is a comprehensive, easily accessible version of our full credit policy hosted on our website. It's also searchable, which means you can jump straight to the sections you want - no endless scrolling required. It is the same document that our credit underwriters use to assess an application, so you will have a better understanding of whether Bluestone is the right fit for your customer.

You can jump in directly using this link, or access it anytime from our website. It will always be updated with our latest policy changes.