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.

Provider
Ad rate
p.a.
Comp rate*
p.a.
Monthly
repayment
 
Budget Home Loan OO P&I
2.68% 2.74% $1,618 More details
2.89% 2.89% $1,663 More details
2.39% 2.40% $1,558 More details
Economy Variable P&I 70%
2.69% 2.86% $1,620 More details

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. Introductory rate products were not considered for selection. Monthly repayments were calculated based on the selected products’ advertised rates, applied to a $400,000 loan with a 30-year loan term. Rates correct as at 08 July 2020. 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 2019. 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 2019) 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 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.

*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.

Latest Articles

author-avatar
Alex joined Savings.com.au in 2019. He is passionate about providing Australians with the information and tools needed to make them financially stable for their futures.

Collections:

Get free insights & tips monthly

By subscribing you agree to the Savings Privacy Policy

Loading data please wait...

{{returnData.productName}}

Overview

Current Rate

{{returnData.currentRate | percentage:2}}

Comparison Rate*

{{returnData.comparisonRate | percentage:2}}

Rate Type

{{returnData.rateType}}

Advertised Rate

{{returnData.advertisedInterestRate}}

Comparison Rate*

{{returnData.comparisonRate}}

Monthly Repayment

{{returnData.monthlyRepayment}}

Interest Type

{{returnData.interestType}}

Total Interest Rate

{{returnData.totalInterestRate | percentage:2}}

Base Interest Rate

{{returnData.baseInterestRate | percentage:2}}

Bonus Interest Rate

{{returnData.bonusInterestRate | percentage:2}}

Total Interest Rate

{{returnData.totalInterestRate | percentage:2}}

Introductory Rate

{{returnData.introductoryRate | percentage:2}}

Introductory Term

{{returnData.introductoryTerm}}

Base Interest Rate

{{returnData.baseInterestRate | percentage:2}}

Term

{{returnData.term}}

Advertised Interest Rate

{{returnData.advertisedInterestRate | percentage:2}}

Interest Frequency

{{returnData.interestFrequency}}


Fees and Features

Ongoing Annualised Fee

{{returnData.annualFee}}

Upfront Fee

{{returnData.upfrontFee}}

Offset Account

Redraw

Principal & Interest

Interest Only

N/A{{returnData.interestOnly}}

Max loan to value ratio (LVR)

{{returnData.maxLVR | percentage:0}}

Lump sum repayments

N/A

Additional repayments

Maximum Loan Term

{{returnData.maximumLoanTerm}}

Upfront Fee

${{returnData.upfrontFee}}

Ongoing Monthly Fee

{{returnData.ongoingFees}}

Early Repayment Fee Applies

N/A

Vehicle Types

{{returnData.vehicleType}}

Maximum Vehicle Age

{{returnData.maximumVehicleAge}}

Pre Approval Available

N/A

Online Application

N/A

Account Keeping Fee

{{returnData.accountKeepingFee}}

Minimum Monthly Deposit

{{returnData.minMonthlyDeposit}}

Linked Account Required

N/A

Interest Calculated

{{returnData.interestCalculated}}

Interest Paid

{{returnData.interestPaid}}

Online Application

N/A

ATM

N/A

EFTPOS

N/A

Account Keeping Fee

{{returnData.accountKeepingFee}}

Minimum Monthly Deposit

{{returnData.minMonthlyDeposit}}

Linked Account Required

N/A

Interest Calculated

{{returnData.interestCalculated}}

Interest Paid

{{returnData.interestPaid}}

Online Application

N/A

ATM

N/A

EFTPOS

N/A

Minimum Deposit

{{returnData.minDeposit | currency : '$' : 0}}

Upfront Fees

{{returnData.upfrontFee | currency : '$' : 0}}

Annual Fees

{{returnData.annualFee | currency : '$' : 0}}

Notice Period to Withdraw

{{returnData.noticePeriodToWithdraw}}

Online Application

N/A

Automatic Rollover

N/A

Maturity Alert

N/A