Homebuyers up in the air despite new government home loan support

The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.

Labor's "Help to buy" home loan scheme

Labor's centrepiece cost-of-living policy announced during the election was its Help to Buy scheme, which aimed to slash the cost of buying a new dwelling by 40 per cent and an existing one by 30 per cent.

Up to 10,000 applicants could get smaller deposits, smaller mortgages and smaller repayments.

Low-income borrowers may still find it hard to qualify for a mortgage when relying on a 2 per cent deposit, especially given that other schemes have not been successful.

Home loan qualification

The federal government concedes that saving a 2 per cent deposit won't be nearly enough for most low- to middle-income borrowers to qualify for finance to buy a home.

This is particularly so given that the mortgage might still be over $600,000 even after the government’s contribution , depending on where the home is located.”

That said, the barrier to entry for battlers may not be permanent.

NHFIC’s existing first-home loan scheme, requiring applicants to put down 5 per cent has a 90 percent success rate.

It’s not much for the desperate battler looking to buy a home, but it might provide some hope for someone in need of a loan to purchase an $800,000 home with only $16,000 instead of $40,000 deposit.

First-home buyers who don’t have government help and a 20 per cent deposit will need to pay lenders mortgage insurance.

Home loan experts

It would be essential for first home buyers to consult experts where and what to buy, especially given they will eventually need to pay back the government's equity stake, including capital growth.

It is even more important when, fundamentally, they will have to give up a significant percentage of the home equity and any value gain if they choose to sell down the track. In fact, this may prevent them from upgrading at all.

A survey of 1000 Australians found 41 per cent want the new federal government to address housing affordability, as many as those wanting an improved healthcare system, and even more than those seeking action on climate change.

Published:Sunday, 29th May 2022
Source:

Please Note: If this information affects you, seek advice from a licensed professional.

Share this news item:

Finance News

Clear

Club Marine Recognised for Outstanding Service with 2025 Product Review Award

19 Nov 2025: Paige Estritori

Club Marine, Australia's leading provider of recreational boat insurance, has been honoured with the 2025 Product Review Award for Insurance. This accolade is a testament to the company's unwavering commitment to customer satisfaction and service excellence. - read more

Markel Insurance Expands into Australian Marine Market with New Leadership

19 Nov 2025: Paige Estritori

Markel Insurance, a prominent global insurer, has announced the appointment of Tim Wills as Head of Marine - Australia. This strategic move signifies Markel's entry into the Australian marine insurance market, beginning with marine cargo coverage. - read more

Addressing the $38 Billion Equity Shortfall in Australian SMEs

19 Nov 2025: Paige Estritori

Australian small and medium-sized enterprises (SMEs) are pivotal to the nation's economy, representing only 6% of all businesses yet contributing 26% to the Gross Domestic Product (GDP). Despite their significance, these businesses face a substantial barrier: a $38 billion equity funding gap that stifles their growth potential. - read more

Click for more Finance News

Time to Refinance?

If you are seeking lower rates, lower fees and more flexibility in your home loan. you are in luck! Our national panel of mortgage brokers is looking forward to an opportunity to assist you. Apply online for a free eligibility assessment and one of our broker network refinance specialists will get on the case to track down the best deal for your individual circumstances. Without any obligation and at no charge to you!

... start here ...