Full details of HomeBuilder 2.0: Extended but reduced

author-avatar By on November 30, 2020
Full details of HomeBuilder 2.0: Extended but reduced

Photo by cetteup on Unsplash

At the weekend, the Government extended the HomeBuilder grant to 31 March, albeit reducing it from $25,000 to $15,000.

For the extended grant, contracts must be signed between 1 January and 31 March 2021, but applications can now be submitted up until 14 April 2021 inclusive.

The property price caps for new builds to receive the grant have also been raised in New South Wales and Victoria, to $950,000 and $850,000 respectively.

It remains at $750,000 for other states.

The construction commencement deadline is now also six months for all eligible contracts signed on or after 4 June 2020, having previously stood at three months.

The Government has budgeted an extra 15,000 homes for the extra scheme, adding to the 27,000 spots already budgeted for, which cost approximately $688 million, bringing the total cost of the scheme to about $913 million.

Buying a home or looking to refinance? The table below features home loans with some of the lowest variable interest rates on the market for owner occupiers.

Lender
Advertised rate Comparison rate Monthly repayment Rate TypeOffsetRedrawOngoing FeeUpfront FeesLVRLump Sum RepaymentAdditional RepaymentsPre-approval
VariableMore details
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
VariableMore details
WIN YOUR HOME LOAN INTEREST FREE

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • WIN your home loan interest free and save up to $1.1 million. Refinance by 29 October. T&Cs apply.
  • Refinance Only. Fast online application, refinance in minutes, not weeks.
  • No Nano fees, Free 100% offset sub account. Mobile app. Visa debit card & instant payments.
WIN YOUR HOME LOAN INTEREST FREE

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • WIN your home loan interest free and save up to $1.1 million. Refinance by 29 October. T&Cs apply.
  • Refinance Only. Fast online application, refinance in minutes, not weeks.
  • No Nano fees, Free 100% offset sub account. Mobile app. Visa debit card & instant payments.
VariableMore details
YOU COULD WIN $100k TO PAY DOWN YOUR LOAN*

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • For a chance to win $100K towards your home loan, apply with Athena before Oct 31 & be approved by Dec 15
  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
YOU COULD WIN $100k TO PAY DOWN YOUR LOAN*

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • For a chance to win $100K towards your home loan, apply with Athena before Oct 31 & be approved by Dec 15
  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
VariableMore details
AN EASY ONLINE APPLICATION

Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)

  • Unlimited additional repayments
  • Unlimited free redraws
  • Optional 100% offset can be added for $120 p.a.^
AN EASY ONLINE APPLICATION

Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)

  • Unlimited additional repayments
  • Unlimited free redraws
  • Optional 100% offset can be added for $120 p.a.^
VariableMore details
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services

Rates correct as of September 26, 2021. View disclaimer.

Prime Minister Scott Morrison said HomeBuilder drives demand in the construction sector.

“It’s critical we keep the momentum up for Australia’s economic recovery," he said.

“Extending HomeBuilder will mean a steady pipeline of construction activity to keep tradies on the tools.”

Shadow Housing Minister Jason Clare said the HomeBuilder money would have been better spent on social housing

"The Morrison spin machine says they are extending the HomeBuilder Scheme because it has been so successful. The fact is they have to extend it because the original scheme was too small and was badly designed," he said.

According to Housing Minister Michael Sukkar, HomeBuilder's grant reduction and price cap rise was done in consultation with the construction sector and with market conditions in mind.

Mr Sukkar also said the most recent data from 20 November showed HomeBuilder had 23,877 applications - a remarkable turnaround given as of 9 October it had only 11,000 applications.

Applications are subject to revisions from the states and territories, and have not been assessed for eligibility. 

Judging the success of HomeBuilder

Housing Industry Australia (HIA) managing director Graham Wolfe said HomeBuilder was "incredibly successful".

“HomeBuilder has exceeded industry’s expectations for both new home projects and renovation work. HomeBuilder has generated jobs in construction, manufacturing and retail, supported Australians to take up home ownership and will continue to underpin the Australian economy in 2021 and beyond,” he said.

Master Builders Australia (MBA) CEO Denita Wawn said HomeBuilder provides Australians a "leg up".

“Extending HomeBuilder is a giant leap forward towards economic recovery. It will generate billions in economic activity, help save thousands of builder and tradie businesses from going under and protect thousands more jobs in the building supply chain,” she said.

Australian Financial Security Authority (AFSA) data from earlier in November indicated insolvencies in construction, mining, and retail spiked 38%. 

The latest fortnightly data also indicated insolvencies were up 6.25% in the construction sector, while in late October bankruptcies across all sectors were up 16% as mortgage deferrals and the JobKeeper rate were wound back.

Construction data released last week showed that while the industry was down 2% overall, the value of new private builds and renovations were up 1% and 4.56% respectively. 

Mr Clare also pointed to some additional statistics.

"Last financial year 170,000 homes were built across Australia. This financial year the [HIA] predict as few as 150,000 homes will now be built and Treasury currently predicts 140,000 homes will be built," he said.

"According to work done by [MBA], this extension of the Scheme will only increase the number of homes built this financial year by up to 1,569."

Data from quotes platform Buildxact also revealed that the volume of quotes was up in the September quarter, but the win rate was down to 13.65%. 

In the 2018-2019 financial year, MBA donated $39,600 to political parties - $23,100 to the Australian Labor Party across two transactions, and $16,500 to the WA Liberal Party also across two transactions. 


Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:

  • The big four banks are: ANZ, CBA, NAB and Westpac
  • The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2020. They are (in descending order): Great Southern Bank, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
  • The larger non-bank lenders are those who (in 2020) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.
  • If you click on a product link and you are referred to a Product or Service Provider’s web page, it is highly likely that a commercial relationship exists between that Product or Service Provider and Savings.com.au

Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site.

In the interests of full disclosure, Savings.com.au, Performance Drive and Loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.

*Comparison rate is based on a loan of $150,000 over a term of 25 years. Please note the comparison rate only applies to the examples given. Different loan amounts and terms will result in different comparison rates. Costs such as redraw fees and costs savings, such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.

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Harrison is Savings.com.au's Assistant Editor. Prior to joining Savings in January 2020, he worked for some of Australia's largest comparison sites and media organisations. With a keen interest in the economy, housing policy, and personal finance, Harrison is passionate about breaking down complex financial topics for the everyday consumer.

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