Albanese’s five per cent home deposit plan creates a ‘risk for lenders’
Helia CEO Pauline Blight-Johnston says Prime Minister Anthony Albanese’s new five per cent home deposit plan, which sees the government step in as the mortgage insurer creates a “risk for lenders”.
“It is still important that the lenders mortgage insurance industry is around to support investors and upgraders who all need access to lenders mortgage insurance,” Ms Blight-Johnston said.
“The first reason, it does put risk onto the government balance sheet … whilst it may look like it hasn’t cost the government very much so far, we’ve been in a period of very low unemployment, when that employment rates changes that could change quite dramatically.
“The second reason is the guarantee provided by the government is nowhere near as strong as a lenders mortgage insurance guarantee, in fact it only pays out we think about 40 cents of the dollar of what lenders mortgage insurance would pay out, which creates a risk for lenders.”
