PHOTO: First-home buyers are unlikely to find free-standing houses under the scheme’s price limits within 15 kilometres of the Sydney or Melbourne CBDs.

All the initial places in the federal government’s First Home Loan Deposit Scheme have been snapped up, as new borrowers rush to take advantage of record-low interest rates and the renewed vigour in the property market.

The first 3000 scheme positions released to National Australia Bank and the Commonwealth Bank have already been reserved, according to spokespeople from both banks.

A NAB spokesperson said: “We have a customer waitlist for positions as they become available. We continue to work with the National Housing Finance and Investment Corporation as it makes a further 7000 places available from 1 February.”

Of those spots, 2000 places will be shared between NAB and CBA. A further 5000 loans will be made available through smaller lenders.

Good intentions, big limitations

Despite the FHLDS’s popularity, experts point to its limitations. “The scheme has good intentions, in that it is designed to help people get the deposit together they need to buy their first home,” says financial services firm Pitcher Partners’ client director, Jason Fallscheer. “It can take years to save the deposit even for a modest property.”