The government is promoting their Help to Buy scheme where they will own 30-40% of your home (instead of you). While it might sound good to Australians desperate to get into a house, the details are terrifying. One of those details that didn’t get much media attention was the structure of the mortgage. Government won’t be a co-owner of the house, they’ll be a second mortgagor. That means they are behind whichever Big Bank gives you the main mortgage.

This is bad news because if house prices go down at all (they are currently at record highs) the Big Bank gets first priority to recover all of their losses, leaving the homeowner and the government (aka taxpayers) out of pocket. That means the banks will probably be getting risk free profits at our expense. This is just one of the many problems with “Help to Buy” which means it won’t help at all.

One Nation has the real solutions to the housing crisis. Start with cutting record immigration, banning foreign ownership and letting tradies do their job, not pumping up Big Bank profits.

Transcript

Senator ROBERTS: Thank you, Minister. Just to confirm, the bank or the lender would be the first mortgagor and the government would be the second?

Senator AYRES: Yes, that’s exactly right, and there are, of course, other arrangements that people have in the private sector that that will look very similar—that is, for the participant, the relationship with the approved lender and the second mortgage will be exactly the same as other Australians have, but there will be a lower mortgage threshold and lower repayments for that group of Australians who satisfy the criteria.

Senator ROBERTS: In the event of a default or price fall, is the bank entitled to recover its losses before the government does? That would seem to be the case.

Senator AYRES: Yes. Just like in an arrangement that you might have or any other Queenslander might have with their lender, there are shared risks and shared benefits.