Homebuyers up in the air despite new government home loan support
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.
The government's promise of an equity contribution will help the most disadvantaged Australians to get a home loan, but they still won't be able to afford one.
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 Author:
Please Note: We do not endorse any specific products or companies. Some content is sourced from third parties, including press releases, and may not be independently verified for accuracy or completeness.
Judo Bank’s sharp share price fall on 25 June has put a spotlight on the pressure building in parts of Australia’s small business lending market. The ASX-listed specialist lender, known for focusing on small and medium-sized enterprises, saw its shares drop heavily after it disclosed a small group of deteriorating business loans and lifted its expected cost of managing credit risk. - read more
The Reserve Bank of Australia’s June decision to keep the cash rate target unchanged at 4.35 per cent marks an important pause after three consecutive rate increases earlier in 2026. For households, sole traders and small to medium-sized business owners, the hold does not mean borrowing has suddenly become cheaper. It does, however, create a valuable moment to reassess existing debt, planned applications and overall cash flow before the next policy move. - read more
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!
Welcome to the world of car ownership! If you're a first-time borrower in Australia, you're likely to feel a mix of excitement and apprehension. Acquiring a car loan is a significant financial responsibility, and navigating through the options can be daunting. This introductory guide is designed to set you on the right path to making a well-informed decision. - read more
Personal loans are a type of financing option that individuals can use to fund various personal expenses. Unlike mortgages or car loans, they aren't earmarked for a specific purpose, giving borrowers more flexibility in how they use the funds. These loans are usually unsecured, which means you don’t have to provide collateral to borrow money. - read more
Personal loans are a type of unsecured credit that allows individuals to borrow money for various personal expenses, including consolidating debt, making home improvements, or funding significant life events. Unlike secured loans that require collateral, personal loans rely on your creditworthiness, making them an accessible option for many Australians. - read more
Knowledgebase
Principal: The original sum of money invested or lent, on which basis interest and returns are calculated.
No comments yet. Be the first to share your thoughts.