Primary vendor CBA will not be providing shared-equity initiative through mortgage brokers
The Australian Government’s Help to Buy scheme is scheduled to go live on 5 December, but not everyone is impressed by its initial rollout.
Under the scheme, eligible Australians will be able to access a shared-equity deal where the government chips in up to 30% of the price of an existing home or up to 40% for a new build.
Borrowers will be able to purchase a home with as little as a 2% deposit without lenders’ mortgage insurance (LMI).
Administered by Housing Australia, the scheme is targeted towards low- and middle-income earners, with income thresholds capped at $100,000 for individuals and $160,000 for joint applicants and single parents.
The government predicts up to 40,000 households will enter the property market over the next four years via the scheme.
"For families and individuals including essential workers, Help to Buy offers a meaningful pathway to home ownership,” said Housing Australia chief executive Scott Langford. “Housing Australia is proud to deliver this important initiative on behalf of the Australian Government, to help more Australians achieve the dream of home ownership."
Commonwealth Bank has been selected as the major banking vendor of the scheme, with CBA retail bank group executive Angus Sullivan saying: “We know it can be challenging for first home buyers or someone returning to the market to take that step onto the property ladder.
“That’s why we’re really pleased to be supporting the Government’s Help to Buy initiative, aimed at making home ownership more accessible for more Australians.”
Damien Walsh, managing director of customer-owned bank Bank Australia, which is also participating in the scheme, said: "Being selected to deliver Help to Buy is a proud moment for Bank Australia. It reflects our commitment to affordable and accessible housing and the communities we serve. As we continue to grow, it's important we invest in areas that matter to our customers - and Help to Buy is a great example of this."
Not everyone has welcomed the rollout of the scheme.
Help to Buy not available through broker channel
Anja Pannek (pictured), chief executive of the Mortgage and Finance Association of Australia (MFAA), welcomed the objectives of the scheme, but suggested the initial phase is limiting equitable access for Australian first-home buyers.
“Shared equity is a significant long-term commitment. Borrowers need clear, impartial guidance to understand how the Government’s equity share in their home works, what it means for future borrowing capacity, and how it may impact refinancing or selling,” Pannek said. “This means access to the scheme has to be available through mortgage Brokers.”
But Pannek noted that primary vendor CBA will not be providing Help to Buy through mortgage brokers.
“We have consistently advocated for Help to Buy to be accessible through brokers from day one, and we will continue to press for this. Consumers should be able to access government housing initiatives through their channel of their choice.”
“We understand that additional lenders are expected to be added to the panel early next year. This will be critical for ensuring broader access to the Scheme. We urge all lenders, present and future to allow interested applicants to get access to the scheme through their mortgage brokers.”
