Labor calls for expansion to First Home Loan Deposit scheme

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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

Variable
More details
UNLIMITED REDRAWSSPECIAL OFFER
  • 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%
UNLIMITED REDRAWSSPECIAL 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%
Variable
More details
AN EASY DIGITAL APPLICATION
  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
AN EASY DIGITAL APPLICATION

Neat Variable Home Loan (Principal and Interest) (LVR < 60%)

  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
Variable
More details
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES
  • 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
Variable
More details
NSW/VIC/SA METRO & INNER REGIONAL AREAS$5000 CASHBACK. T&Cs APPLY.
  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
NSW/VIC/SA METRO & INNER REGIONAL AREAS$5000 CASHBACK. T&Cs APPLY.

Variable Home Loan (Principal and Interest)

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

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of May 26, 2022. 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. 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. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please visit the web site links at the bottom of this page.

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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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