Broker group urges support for both first-home buyers and existing borrowers
The Finance Brokers Association of Australia (FBAA) has welcomed recent housing policy proposals from both the federal government and the Opposition, but warns that support for existing mortgage holders must not be overlooked in the broader conversation around housing affordability.
Peter White (pictured above), managing director of the FBAA, acknowledged the efforts of both major political parties to make home ownership more accessible, particularly for first-time buyers.
“The FBAA supports workable and sound measures and policies that will remove unnecessary barriers for people to enter the housing market,” he said. “We commend both major parties for prioritising this in their policies and for their innovative announcements which we support in principle.”
While welcoming these commitments, White cautioned that the proposals do not address the needs of current borrowers who face rising cost-of-living pressures and high interest rates.
“While these announcements should positively impact first-home buyers, we must also recognise that they do not directly help the much larger percentage of people who are existing mortgage holders,” he said. “It is important that policies don’t just help new borrowers enter the market, but existing borrowers to stay in the market and retain their homes.”
He reiterated the association’s call for measures that assist borrowers looking to refinance, including a review of serviceability buffers. The FBAA has long advocated for a reduction in the assessment rate, and White noted the Opposition’s recent election commitment on this front.
“If existing borrowers end up leaving the market due to cost-of-living pressures and an unrealistic serviceability assessment rate, they will put pressure on the rental market from the back end, possibly negating the new home buyers on the front end,” he said.
White also addressed concerns around the possible unintended consequences of government initiatives and an anticipated decline in interest rates. He said these factors could push property prices higher, potentially eroding the benefits for first-time buyers.
“We also agree with the concerns of many economists that these – albeit positive – initiatives, along with predicted and much-needed interest rate reductions, may increase housing costs,” he said. “While this is a positive for existing homeowners, it may have the effect of cancelling out some of the benefits for first-home buyers, due to them needing a greater deposit and being unable to meet credit criteria.”
On the proposed expansion of 5% deposit home loans without lenders mortgage insurance (LMI), White urged caution. He pointed to structural limitations that may prevent lenders from offering such products at scale.
“As a word of caution, while it is a positive move to enable first-home buyers to access a mortgage for a 5% deposit and pay no LMI, there are complexities that may impact the ability of lenders to provide these loans to all applicants,” he said.
“Further impacting a lender’s ability to provide low-deposit loans that are part of a government-backed scheme is their capacity to securitise their mortgage portfolio. This need may result in lenders capping the number of this type of loan they are willing or able to provide.”
Other industry groups have earlier weighed in on the political parties’ housing proposals. Mortgage & Finance Association of Australia (MFAA) chief executive Anja Pannek said housing affordability has become a central issue in the election campaign.
“The major parties are clearly recognising housing affordability and access to home ownership as key issues for voters – particularly first-home buyers – in this election,” she said.
Want to be regularly updated with mortgage news and features? Get exclusive interviews, breaking news, and industry events in your inbox – subscribe to our FREE daily newsletter. You can also follow us on Facebook, X (formerly Twitter), and LinkedIn.
