The Opposition has called for further government support to first-home buyers via the expansion of the First Home Loan Deposit Scheme.
Shadow Minister for Housing and Homelessness Jason Clare said the First Home Loan Deposit Scheme (FHLDS) needs to be expanded to include the building of homes, which would in turn support tradies.
"Labor is calling on the Morrison Government to expand the scheme by lifting the cap for first home buyers who build new homes," Mr Clare said in a statement.
"This will assist first home buyers on low and middle incomes build a new home with a deposit of as little as 5% without the requirement to pay for lenders mortgage insurance, and keep tradies building homes instead of building a longer dole queue."
"Labor called for this on 30 May but it was ignored by the Government in its HomeBuilder scheme which has been panned as badly targeted and too small to save a lot of tradie jobs."
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.
Smart Booster Home Loan
- Discount variable for 1 year <=80% LVR
- No ongoing fees
- Unlimited redraw facility
Monthly repayments: $1,476
- Discount variable for 1 year
- No ongoing fees
- Unlimited redraw facility
Base criteria of: a $400,000 loan amount, variable, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. If products listed have an LVR <80%, they will be clearly identified in the product name along with the specific LVR. The product and rate must be clearly published on the Product Provider’s web site. Monthly repayments were calculated based on the selected products’ advertised rates, applied to a $400,000 loan with a 30-year loan term.
The FHLDS was launched on January 1 of this year and can assist first-home buyers in securing a home loan with a deposit of 5% by guaranteeing up to 15% of the value of the home, saving buyers from the cost of Lender's Mortgage Insurance (LMI).
The scheme was capped at 10,000 places which were filled entirely after five months, and the next round of the scheme opens on 1 July with another 10,000 places up for grabs over the next 12 months.
Mr Clare said the housing construction industry would fall off a cliff if the FHLDS wasn't expanded, in addition to a range of other measures.
"Labor has repeatedly called on the Morrison Government to ensure that their construction support package included:
- Construction of more social housing;
- Repair and maintenance of existing social housing;
- Construction of more affordable rental accommodation for frontline workers;
- Expansion of the First Home Loan Deposit Scheme for new builds; and
- Grants to first home buyers who build their first home.
"The Government needs to pull their head out of the sand, expand this scheme and help save the jobs of thousands of Aussie tradies."
HomeBuilder in disarray?
Prime Minister Scott Morrison announced the HomeBuilder scheme on June 4 to a chorus of criticism, and three weeks later the scheme is yet to kick into gear.
Each state and territory is responsible for administering the scheme but to date only Tasmania and South Australia have signed on.
Minister for Housing Michael Sukkar said in a statement that HomeBuilder had been designed to complement each state and territories various existing housing grants and concessions.
"The Commonwealth is engaged at present with state and territory governments on the national partnership agreements to make the delivery of the HomeBuilder as seamless as possible," Mr Sukkar said.
A spokesperson for Queensland Treasurer Cameron Dick told the ABC he had expressed concerns about the design and implementation of the scheme.
"The Queensland Government supports the intent of the policy and is seeking to resolve the remaining issues around administration," the spokesperson said.
"We're continuing to work with the Federal Government to resolve those matters as quickly as possible."
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): Credit Union Australia, 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.
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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