The exclusion of mortgage brokers from the federal government’s Help to Buy scheme by Australia’s biggest bank could undermine the initiative’s efforts to support first time buyers, according to the Finance Brokers Association of Australia (FBAA).

FBAA managing director Peter White AM said the Commonwealth Bank of Australia’s (CBA) decision to only accept Help to Buy applications through its own proprietary channels risked “killing the goose that laid the golden egg”.

“The Help to Buy scheme is the game changer many aspiring homeowners have been waiting for, but CBA has slammed the door shut on thousands of buyers who rely on brokers to secure finance,” he said.

“Major banks are simply there to sell a product and, unlike brokers, they’re not obliged to act in the best interests of clients and this gives them enormous power over a scheme that’s meant to be all about boosting home ownership levels.

“If the nation’s biggest bank has an effective of veto over participants in the Help to Buy scheme, how does this support the federal government’s goal of creating a new generation of homeowners?”

Mr White said it was unclear whether CBA notified the federal government that as a participating lender it intended to restrict access to Help to Buy loans through its direct proprietary channels.

“By putting itself forward as a participating lender and then excluding applications from anyone other than direct clients of CBA, it would seem Australia’s biggest bank has taken a national scheme underwritten by taxpayers and turned it into a proprietary marketing tool,” he said.

“The fixation from major banks on excluding brokers from the home loan process comes with a huge downside for borrowers, many of whom won’t be eligible for products they offer.

“Brokers can help borrowers access a far wider range of products than those offered by the banks, products best suited to their own unique individual circumstances.

“There should be a level playing field under the Help to Buy scheme that caters for all borrowers, rather than shoring up the power of major banks to exert further market dominance.”