The best laid plans of mice and property locusts, via the AFR:
Big banks are seeking the flexibility to charge higher interest rates under the Morrison government’s scheme to help first home buyers because of the increased risk of lending to first-time borrowers with as little as 5 per cent deposit.
The big banks also query whether the government’s promised first home loan deposit scheme can be up and running by its scheduled January 1 start date.
Bankers are concerned that home buyers with deposits as little as 5 per cent of a property’s value will be riskier than other first-time borrowers who usually are required to have saved a minimum deposit of at least 10 per cent, and sometimes as high as 20 per cent.
…Housing Minister Michael Sukkar is trying to boost competition in the scheme against the big banks, by permitting only two of the big four – ANZ, Commonwealth Bank of Australia, National Australia Bank and Westpac – to participate.
Jeez, who could have that coming. Just 11 years from the GFC and here we are sponsoring sub-prime kiddies into unaffordable mortgages with the tax-payer standing directly behind it.
At least the banks remember.
Expect a solution that hinges on you taking on even more of the risk.
