Dear Scott,
Albo’s back, and so is his housing policy. So why would anyone want a 5 per cent deposit? That just means borrowing 95 per cent! Who benefits? The banks. It’s basic maths: smaller deposit = bigger loan = more interest over time. Why are we encouraging people to dive deeper into debt in one of the most debt-ridden countries on Earth? Would love to hear your take on this.
Andrea
Hi Andrea
Give me a high five!
Who wins?
The banks! They get to lend out 95 per cent of the purchase price, and rake in decades of interest repayments.
Who loses?
Lots of people.
First, anyone who doesn’t own a home right now – because this policy will increase housing prices.
Second, anyone who borrows 95 per cent of the value of a home. After all, they don’t even own the doorknob! One market (or employment) wobble and they’ll be underwater financially and emotionally.
Finally, you, Andrea, and all taxpayers. That’s because, if these ‘five percenters’ end up doing a Dutton, the banks will simply pass on the losses to the taxpayer.
My view?
The Government should not be encouraging broke people to borrow huge sums of money and roll the dice on some of the most expensive real estate in the world.
This policy has ‘subprime’ written all over it.
Scott