Home loan scheme attracts strong interest

The Morrison government's First Home Loan Deposit Scheme has seen strong initial interest from would-be homebuyers, Housing Minister and Assistant Treasurer Michael Sukkar says.

The scheme allows first home buyers to secure a home loan with as little as a five per cent deposit.

From February 1, the Commonwealth Bank of Australia and National Australia Bank, along with 25 non-major lenders began offering these guaranteed loans.

Mr Sukkar said the scheme has been designed to ensure strong representation of smaller lenders.

"This will promote competition between the major and non-major lenders, and ensure the scheme has broad geographic reach, including in regional and remote communities," he said in a statement on Saturday.

Under the mandate, non-major lenders will receive no less than 50 per cent of the 10,000 guarantees allocated per financial year.

A further 10,000 guarantees will become available from July 1.