Opposition joins the call urging financial relief for homeowners and renters

author-avatar By on March 19, 2020
Opposition joins the call urging financial relief for homeowners and renters

Photo by Zane Lee on Unsplash

Shadow Minister for Housing & Homelessness Jason Clare has urged the Government to develop plans to stop people being foreclosed on.

These plans would be similar to what the UK and the US introduced recently, passing emergency legislation to ensure renters and mortgage holders are not forced out of their home if they fail to pay rent or their mortgage. 

The UK government announced this week a three-month 'mortgage payment' holiday, while US mortgage backers have halted foreclosures for 60 days.

Last night, President Trump announced a moratorium on all foreclosures and evictions for single family homeowners with Federal Housing Administration-insured mortgages for that period.

For renters in the UK, landlords will not be able to start eviction proceedings for at least three months.

These are much needed measures in Australia and these measures would prevent a total housing collapse, according to Mr Clare.

"More Australians are behind in their mortgage repayments today than at any time since the Global Financial Crisis, and rental stress is through the roof," he said.

"In addition to that, they should also take steps to make sure no one has their power, water gas or phone cut off because they, or their family, are affected by the virus and can't pay the bill.

"A practical plan needs to be developed as quickly as possible tailored to the situation in Australia."

This suggestion comes at the same time the Reserve Bank cut the cash rate twice in one month for the first time.

The cash rate sits at 0.25%, theoretically making mortgages cheaper as lenders slash their interest rates.

Looking to refinance your home loan? Below are variable owner-occupier loans with some of the lowest interest rates in the market.

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
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.^
FixedMore details
NO UPFRONT OR ONGOING FEES

Basic Home Loan Fixed (Principal and Interest) (LVR < 70%) 3 Years

NO UPFRONT OR ONGOING FEES

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 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. Rates correct as of October 27, 2021. View disclaimer.

The changes recommended by Labor are similar to those proposed by the Greens, with Greens spokesperson for Housing, Senator Mehreen Faruqi, calling for emergency measures to support renters during the pandemic. 

Ms Farqui's suggested measures include:

  • An eviction moratorium: State and Territory laws govern evictions with most allowing for eviction if the tenants are 14 days or more behind with their rent. This should be scrapped immediately
  • Fund crisis housing: The Federal Government must increase homelessness funding under the National Housing and Homelessness Agreement to $500 million per year and release these funds immediately to States and Territories
  • Freeze rents: A nationwide rent freeze with no increase in rent from the start of 2020 and for the duration of the health crisis.Commonwealth Rent Assistance (CRA) should also be increased.

“In the developing crisis, the government has a responsibility to ensure that no one ends up at risk of homelessness or further rental stress. We must take immediate steps to ensure that no one can be evicted," she said. 

During a health crisis, people without a roof over their heads risk exposing themselves or others to the disease. 

Real Estate Institute of Queensland (REIQ) Chief Operations Officer Josh Callaghan told Savings.com.au yesterday that governments, banks, tenants and property owners all need to work together to find solutions that prevent people from entering into homelessness.

"The REIQ's goal is to ensure all Queenslanders, and Australians, have safe, secure housing and during this unprecedented event all parties need to work together to ensure our housing market is sustainable."

Prime Minister Scott Morrison is set to announce a second round of stimulus: Changes like the ones recommended could be included. 


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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author-avatar
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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