Labor calls for expansion to First Home Loan Deposit scheme

author-avatar By on June 29, 2020
Labor calls for expansion to First Home Loan Deposit scheme

Photo by Michael Glass on Unsplash

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.

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
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
VariableMore details
REFINANCE IN MINUTES, NOT WEEKS

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

  • Refinance only. Fast online application
  • No Nano fees. Free 100% offset sub account
  • Mobile app, Visa debit card & instant payments
REFINANCE IN MINUTES, NOT WEEKS

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

  • Refinance only. Fast online application
  • 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.^

Rates correct as of October 19, 2021. View disclaimer.

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:  

  1. Construction of more social housing;
  2. Repair and maintenance of existing social housing;
  3. Construction of more affordable rental accommodation for frontline workers;
  4. Expansion of the First Home Loan Deposit Scheme for new builds; and
  5. 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."


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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Alex joined Savings.com.au as a finance journalist in 2019. He enjoys covering in-depth economical releases and breaking down how they might affect the everyday punter. He is passionate about providing Australians with the information and tools needed to make them financially stable for their futures.

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