Latest news with #FamilyHomeGuarantee
Sydney Morning Herald
21-07-2025
- Business
- Sydney Morning Herald
Justin has $300,000 in the bank but can't get a home loan
While Flowers was told he could borrow $200,000, the total would not let him buy a home that suited his life. 'It's not practical for me to buy a property in a regional area or small apartment – I have kids I want to see every day.' A 2024 report by Swinburne University of Technology found about 508,000 people aged 55-plus were at risk of 'non-supported housing precarity' in 2019-20 – neither poor enough to qualify for housing assistance nor wealthy enough to buy. 'The problem is, after they go through that first hurdle of being approved by the government, they have to find finance from the bank … which introduces its own restrictions about not lending to older people,' say report co-authors Dr Piret Veeroja and Professor Wendy Stone. 'The governments can provide the settings, regulations and the motivation for the finance sector to reduce its discrimination against older people … really bringing the financial sector on board is a necessary part of the puzzle,' Stone says. Stone says shared equity schemes can work well for some, but older applicants they've spoken to who may be eligible face more complex hurdles. Stone says the aged pension rate is 'set on the assumption that people don't have that large housing cost in retirement'. 'But it's impossible to afford a mortgage or find anything that's affordable in a private market on that payment,' she said. Sally Tindall, Canstar's data insights director, says the government could 'work out a scheme … [where] the bank is happy to take on additional risk for someone over 55.' She says government is canvassing solutions, including a reverse mortgage program and abovementioned housing initiatives, but says Help to Buy is 'probably geared towards younger Australians'. 'It could be a good avenue for all Australians, but more needs to be done,' she says. Tindall says the low uptake of the Family Home Guarantee, which offers 2 per cent deposit and requires a bigger loan, suggests it is not fit for purpose. 'People over 55 who don't have a steady stream of income and an exit strategy are not passing the banks' serviceability test, and the banks can't waive those tests because it's a lot more risk for them.' When ex-police officer Naomi Oakley, 56, divorced nine years ago, she had no savings and was raising three children on one wage. After years of saving, she had $70,000; she applied for a home loan and was rejected. She was devastated. Loading She eventually purchased a three-bedroom unit in Skye, outer south-eastern Melbourne – further from the city than she wanted and far from family and support networks. 'I don't go out for dinner and … getting my hair done is a luxury – you have to give up those small things to have a loan at my age,' Oakley says. 'I also think, 'oh god, I'm in my mid-50s, will I get ill before I pay it off?' But you just have to be positive.' A federal government spokesman says Labor's Help to Buy scheme 'will help Australians get into home ownership with as little as a 2 per cent deposit, and a much smaller mortgage – an important option for those who might need a shorter mortgage term'. 'For older renters, we're making renting more secure with 80,000 long, five-year lease rentals and through our Better Deal for Renters, which is ending no-grounds evictions and rent bidding,' he adds. Brendan Coates, a retirement income expert at Grattan Institute, says Help to Buy is only useful for wealthier renters on the brink of purchasing. 'It's useful for older renters who will often have a deposit but won't have enough time left in the workforce to pay off the loan,' he says. 'Most renters have less than $100,000 in savings – there's no way they can buy a home, particularly if they're approaching retirement.' Raising rent assistance by 50 per cent for singles and 40 per cent for couples should be a priority, Coates says. Shadow Minister for Housing and Homelessness, Andrew Bragg, said: 'The only way to increase home ownership is to boost housing supply. Under the Coalition, Australia was averaging 190,000 new homes per year. Under Labor, we're barely hitting 170,000 new homes per year. 'Labor's Home Guarantee Scheme is almost useless for many mature first home buyers who will be told 'no' by their lender.' Flowers hopes he can eventually buy something, even if it's to leave to his kids. 'I grew up hearing about Australia the lucky country – doesn't feel too lucky to me, and it won't be like that for our children.'
The Age
21-07-2025
- Business
- The Age
Justin has $300,000 in the bank but can't get a home loan
While Flowers was told he could borrow $200,000, the total would not let him buy a home that suited his life. 'It's not practical for me to buy a property in a regional area or small apartment – I have kids I want to see every day.' A 2024 report by Swinburne University of Technology found about 508,000 people aged 55-plus were at risk of 'non-supported housing precarity' in 2019-20 – neither poor enough to qualify for housing assistance nor wealthy enough to buy. 'The problem is, after they go through that first hurdle of being approved by the government, they have to find finance from the bank … which introduces its own restrictions about not lending to older people,' say report co-authors Dr Piret Veeroja and Professor Wendy Stone. 'The governments can provide the settings, regulations and the motivation for the finance sector to reduce its discrimination against older people … really bringing the financial sector on board is a necessary part of the puzzle,' Stone says. Stone says shared equity schemes can work well for some, but older applicants they've spoken to who may be eligible face more complex hurdles. Stone says the aged pension rate is 'set on the assumption that people don't have that large housing cost in retirement'. 'But it's impossible to afford a mortgage or find anything that's affordable in a private market on that payment,' she said. Sally Tindall, Canstar's data insights director, says the government could 'work out a scheme … [where] the bank is happy to take on additional risk for someone over 55.' She says government is canvassing solutions, including a reverse mortgage program and abovementioned housing initiatives, but says Help to Buy is 'probably geared towards younger Australians'. 'It could be a good avenue for all Australians, but more needs to be done,' she says. Tindall says the low uptake of the Family Home Guarantee, which offers 2 per cent deposit and requires a bigger loan, suggests it is not fit for purpose. 'People over 55 who don't have a steady stream of income and an exit strategy are not passing the banks' serviceability test, and the banks can't waive those tests because it's a lot more risk for them.' When ex-police officer Naomi Oakley, 56, divorced nine years ago, she had no savings and was raising three children on one wage. After years of saving, she had $70,000; she applied for a home loan and was rejected. She was devastated. Loading She eventually purchased a three-bedroom unit in Skye, outer south-eastern Melbourne – further from the city than she wanted and far from family and support networks. 'I don't go out for dinner and … getting my hair done is a luxury – you have to give up those small things to have a loan at my age,' Oakley says. 'I also think, 'oh god, I'm in my mid-50s, will I get ill before I pay it off?' But you just have to be positive.' A federal government spokesman says Labor's Help to Buy scheme 'will help Australians get into home ownership with as little as a 2 per cent deposit, and a much smaller mortgage – an important option for those who might need a shorter mortgage term'. 'For older renters, we're making renting more secure with 80,000 long, five-year lease rentals and through our Better Deal for Renters, which is ending no-grounds evictions and rent bidding,' he adds. Brendan Coates, a retirement income expert at Grattan Institute, says Help to Buy is only useful for wealthier renters on the brink of purchasing. 'It's useful for older renters who will often have a deposit but won't have enough time left in the workforce to pay off the loan,' he says. 'Most renters have less than $100,000 in savings – there's no way they can buy a home, particularly if they're approaching retirement.' Raising rent assistance by 50 per cent for singles and 40 per cent for couples should be a priority, Coates says. Shadow Minister for Housing and Homelessness, Andrew Bragg, said: 'The only way to increase home ownership is to boost housing supply. Under the Coalition, Australia was averaging 190,000 new homes per year. Under Labor, we're barely hitting 170,000 new homes per year. 'Labor's Home Guarantee Scheme is almost useless for many mature first home buyers who will be told 'no' by their lender.' Flowers hopes he can eventually buy something, even if it's to leave to his kids. 'I grew up hearing about Australia the lucky country – doesn't feel too lucky to me, and it won't be like that for our children.'
Daily Mail
22-04-2025
- Business
- Daily Mail
Young Aussie mum who thought she was doing the right thing getting on the property ladder opens up about her mortgage hell
A single mum on a six figure salary who bought her first home now regrets the decision, which has turned her life into a financial nightmare. Bonnie Hanson, 35, bought a three bedroom townhouse in Newcastle north of Sydney with a $550,000 bank loan under the Family Home Guarantee scheme in 2021. The federal initiative established by the former Coalition government allows up to 10,000 single parents to buy a home with a deposit of as little as two per cent. Ms Hanson paid five per cent and wasn't concerned about the small deposit paid as she had a well-paid office job. 'I bought a house by myself as a single mum, and I was so proud of myself,' she explained in a recent TikTok. 'I was like, "f*** yeah, f*** the man. I did it. I don't need anyone. I can do things, big, hard things, by myself".' Within six months, Ms Hanson's mortgage repayments had almost doubled from a reasonable $500 per week to $900, which left her struggling to make ends meet. 'I bought at a bad time. I bought when house prices were really high and interest rates were really low, which, at the time, didn't seem like a bad thing,' she recalled. @bigdogbon I am in such a crossroads right now. I want to live a life full of love and joy and work in a field that really supports that. Corporate pays the bills but at what cost? I've missed so much of my kids lives already working to provide a home for them, and now I don't even see the value in the stupid house haha. #finance #homeowner #corporatelife ♬ original sound - bigdogbon 'But then the interest rates rose rapidly, so rapidly I couldn't keep up. The cash rate soared from 0.10 per cent in 2021 to a high of 4.35 before the first official rate cut in more than four years earlier this year. Ms Hanson blamed the banks for allowing her to take out a loan she feels she should never have been approved for. 'The thing that feels the most unfair is the irresponsibility of the bank that loaned a single mum that amount of money,' she told 'They've set us up to fail, and in terms of home ownership, it is horrific.' She has lodged formal complaints with the banks, which are yet to respond to her. Ms Hanson said the amount left owing on her home remains high because she bought at the peak of the market. The single mum estimates she's paid $150,000 in mortgage repayments in the last three years, but has only sliced $25,000 off the loan. It left her wondering as what else she could have done with the money. Ms Hanson has since moved out of the home which she has leased out to a relative while she rents a more affordable home. While having a tenant has helped ease her financial stresses, it has far from solved them. Ms Hanson is weighing up whether to sell her home and pursue a new job in something more rewarding, leaving her home ownership dreams in tatters. However, she still wants to own a place her two kids can call home. 'What if I die tomorrow and I've spent the best years of my life paying this f***ing mortgage?' Ms Hanson asked on TikTok. 'Paying unbelievable interest in three years ... what could I have done with $150,000 in my pocket, what would $150,000 look like for my children if I had just saved that money. 'But it's gone to a bank, for no f***ing reason.' 'Have I failed? Have I made a bad investment?' Ms Hanson's story resonated with many viewers shared similar home ownership ordeals. Others pleaded with Ms Hanson to not give up on home ownership. 'Do not sell your house. In 30 years when you retire you will be glad that u have a fully paid off house,' one said. Another added: 'This is exactly what happened to me. Single mum too and I am so angry about what happened.' 'However, do not sell your house! I almost did, but long term it is better to keep it. It is getting better.' A third advised that she speak to a financial advisor about her options and consider using her equity to downsize or to re-tenant the home. In 2021, more than 10,000 single parents were entitled to access to the Family Home Guarantee scheme. The initiative was designed to help eligible single parents or legal guardians with at least one dependent child buy a property sooner. The scheme allowed eligible buyers to purchase a home with a small deposit without needing to pay lenders mortgage Insurance through a participating lender. The guarantee is not a cash payment or a contribution toward the deposit.
News.com.au
22-04-2025
- Business
- News.com.au
‘Sold a lie': Young mum reveals why she regrets buying a home
When Bonnie Hanson purchased a home in 2021, she felt an overwhelming sense of pride, but within a few short months, she was filled with regret and stress. The 35-year-old secured a $550,000 loan and bought a home in Newcastle using the Family Home Guarantee, a government initiative designed to help single parents purchase property with as little as a two per cent deposit. The government guarantees 18 per cent of a single parent's home loan and, in 2021, over 10,000 single parents were entitled to the scheme. Ms Hanson bought a three-bedroom townhouse in Newcastle. She only had a five per cent deposit, but she figured it'd be okay because she had a good office job. She works in an industry where the average worker earns between $90,000 and $130,000, and you can earn extra if you do contract work. 'Buying the house was a way to prove that I could do it on my own. But now …. It is annoying. Stupid house,' she told 'I bought at a bad time.' Ms Hanson said she felt regret within months because her 'mortgage doubled' within six months and, suddenly, she couldn't afford her home. When the young mum purchased her property, the cash rate was 0.10 per cent. By November 2022, it was 2.85 per cent. From there, the rates just kept surging. By November 2023, they were at a high of 4.35 per cent and, even now, they've only dropped to 4.10 per cent. 'I couldn't keep up with it,' she said. It's been a huge stress for most mortgage holders in Australia and, in Ms Hanson's case, she went from paying $500 per week to over $900 a week, and her decent salary suddenly was eaten up by repayments. In the end, she moved out of her home and is now renting out the property to a relative, while she rents somewhere else because she couldn't afford to stay in the house. 'It was impossible,' she said. Ms Hanson stressed that having a tenant hasn't saved her from financial stress. It has certainly helped, but the mortgage anxiety still looms. 'It saves me about $100 a week and my tenant isn't even close to paying off my mortgage,' she said. The 35-year-old single mum explained that she thinks about money 'every day' and spends half her life worrying about how she'll make ends meet. She's also fuming. She feels like she never should have been approved for a loan and was set up to fail by a system that was meant to help her. 'The thing that feels the most unfair is the irresponsibility of the bank that loaned a single mum that amount of money,' she said. 'They've set us up to fail, and in terms of home ownership, it is horrific.' Ms Hanson said she's made formal complaints to the bank that loaned her the money but has never heard back. She was also on a variable loan when rate rises began and got completely smashed by them. At this point, she is wondering if she should just sell her home. Ms Hanson said that because she bought at the peak of the market, the amount she owes is 'so high' and rates are still inflated. 'I've paid $150,000 off in three years and I've only paid off $25,000 on the loan. Imagine what I could have done with that money if I hadn't been sold a lie that I could afford a home,' she said. She's now at a crossroads. She dreams of selling her home, quitting corporate, and finding a career that pays less but makes her happier, but then she worries she'll regret it. 'I don't know if I could get back into the market,' she admitted. On the other hand, she worries that she will regret not prioritising her own happiness over a mortgage. 'I want to live a life full of love and joy and work in a field that really supports that. Corporate pays the bills but at what cost?' she asked. 'I've missed so much of my kids lives already working to provide a home for them, and now I don't even see the value in the stupid house.'
