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Teachers Mutual Bank Limited – the member-owned banking group operating multiple brands including Teachers Mutual Bank, UniBank, Firefighters Mutual Bank, and Health Professionals Bank – has joined the lending panel of the Help to Buy scheme.
Help to Buy – the government’s shared equity initiative – officially launched in December with just two lenders: the Commonwealth Bank of Australia (CBA) and Bank Australia.
While Bank Australia is making Help to Buy loans available through the broker channel, CBA has taken a different approach, offering the loans through its proprietary channel only.
Teachers Mutual Bank Limited and its three subsidiary brands have now joined the shared equity scheme. The mutual banking group has said that the scheme will be available to members from today (27 July) and will initially only be available directly while it pilots its systems and processes.
The TMB website says: “Register your interest with us and we’ll guide you through eligibility and the application process.”
Help to Buy will then be made available to eligible members through the bank’s accredited mortgage broker network on 6 October.
Teachers Mutual Bank Limited chief customer officer, Greg Johnson, said the bank was proud to be chosen to join the Help to Buy scheme.
“For 60 years, we’ve been helping Australians achieve their financial goals and we’re pleased to partner with the government to make home ownership more accessible for more Australians – particularly essential workers who play such an important role in our communities," he said.
“We are already part of the Australian Government 5 per cent Deposit Scheme and this program provides another pathway for our members to buy a home sooner.”
Speaking of the new additions, Housing Australia CEO Scott Langford said: "Teachers Mutual Bank Limited's participation will provide additional opportunities for key workers and other eligible Australians to access the Scheme through a lender that has a long history of supporting its member communities.
"Many of Teachers Mutual Bank Limited's customers are teachers, health professionals, emergency services workers and other essential workers who make an enormous contribution to our communities each day. Increasing participation in the Scheme will help ensure more Australians can access the support available through Help to Buy," he said.
Langford continued: "Help to Buy is designed to create meaningful pathways into home ownership for eligible Australians who may otherwise struggle to enter the housing market. By welcoming additional lenders to the panel, we are making it easier for more people to access the Scheme and receive support through a lender that meets their needs."
How does Help to Buy work?
Help to Buy sees the government contribute up to 40 per cent of the purchase price for new homes or 30 per cent of existing homes for eligible owner-occupier borrowers.
The scheme offers 10,000 places each year to low and middle-income earners – including essential workers and families who do not own any other property in Australia. This year, income thresholds have been set at $103,000 for individuals and $165,000 for joint applicants and single parents.
It is designed to assist individuals who have made “reasonable” savings toward purchasing a home (have at least a 2 per cent deposit), but require additional support to become a home owner. Buyers must provide a minimum 2 per cent deposit and contribute as much as their finances reasonably allow towards the purchase.
The scheme – administered by Housing Australia – aims to help home buyers purchase a property sooner by reducing the amount of money needed to qualify for a home loan and bridge the gap between what a home buyer can borrow and the price of a home that suits their needs.
Eligible properties must fall under Help to Buy price caps, which are:
| State/territory | Capital city, regional centre* | Rest of state |
| NSW | $1,300,000 | $800,000 |
| Victoria | $950,000 | $650,000 |
| Queensland | $1,000,000 | $700,000 |
| Western Australia | $850,000 | $600,000 |
| South Australia | $900,000 | $500,000 |
| Tasmania | $700,000 | $550,000 |
| The ACT | $1,000,000 | n/a |
| Northern Territory | $600,000 | $600,000 |
| Jervis Bay Territory and Norfolk Island | n/a | $550,000 |
| Christmas Island and Cocos (Keeling) Islands | n/a | $400,000 |
Under the scheme, the Australian government pays the percentage of the home’s purchase price (by way of a loan), and in exchange, the Australian government takes a corresponding equity share in the home. The government keeps a proportional share in the property until buyers fully buy out the equity. The Australian government then proportionally shares in any gains or losses when the buyer sells the home or buys out the government share.
Users can repay the government’s equity stake voluntarily or when selling, though repayment may be required earlier if their financial capacity improves. No upfront lenders mortgage insurance (LMI) is needed; however, borrowers may choose to pay LMI to facilitate the buyback of the government share during the life of the scheme.
More to come.
[Related: Help to Buy launches 10k new places, brings in higher income limits]
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