JobKeeper and JobSeeker: 1.3 million Aussies could lose their home if support stops

Wednesday, 22 July 2020

Mozo research shows that more than a quarter of workers currently relying on JobKeeper and JobSeeker won’t be able to afford their rent or home loan repayments if the government support ceases. This amounts to approximately 1.3 million Australians potentially unable to keep a roof over their heads.This analysis comes after the government announced changes to Covid-19 support payments on Tuesday. While JobKeeper and JobSeeker have been extended beyond the planned September end date, both will see a reduction in the coming financial quarter, and eligibility criteria will change for the Coronavirus supplement.Around 3.5 million workers are receiving JobKeeker payments and 1.6 million are relying on JobSeeker. This means approximately 42% of Australia’s 12.1 million-person workforce is being supported via these government schemes.Mozo’s data showed the vast majority of these people (92%) require this support to remain financially stable. In addition to the worrying housing situation, a third of surveyed income support recipients said they would not be able to afford to pay their bills if the payments stopped, with a fifth also unable to cover the cost of groceries.According to the Australian Bureau of Statistics (ABS), unemployment has reached a 22-year high of 7.4%, with 992,000 people recorded as officially out of work. “With the jobs market on life support, JobKeeper and JobSeeker payments are critical in ensuring people can remain in their homes and have enough money to cover necessary expenses,” Mozo Director Kirsty Lamont said.

BOQ the latest bank to tighten lending criteria

Monday, 20 July 2020

BOQ Group, which includes Virgin Money, will be revising its debt-to-income (DTI) policy for home loan applications, amid concerns that a growing number of borrowers will be unable to service large loans.Mortgage applications with a DTI ratio of above six, that is, more than six times the borrower or borrowers’ annual income, will now be subjected to greater scrutiny and must be accompanied by detailed supporting notes.The bank will also introduce a minimum nominal rental figure of $650 per month in its serviceability requirements for all home loan applications, effective 20 July.BOQ is the latest in a growing list of banks that have tightened lending criteria. Last week, ANZ informed brokers that it may be turning down loans with a DTI ratio of more than seven, beginning 3 August.Teachers Mutual Bank also reconsidered its appetite for risk earlier this month, lowering its DTI threshold from a maximum of eight to seven, and ceasing lending for off-the-plan property purchases.Since March, banks have made a number of changes in response to growing credit quality risks, including requesting more proof of income, withdrawing lenders mortgage insurance waivers, and denying loans to workers in vulnerable industries.Self-employed applicants and those who are employed on a casual or contract basis may have also found it’s much more difficult to secure a loan or get approved for the amount they want.RELATED: Could tougher lending rules shut out first home buyers?All this has tempered the enthusiasm many first homebuyers (and anyone else with sights on the property market) may have felt at the news of potential dips in housing prices. But according to Mozo’s property expert Steve Jovcevski there are workarounds.“First homebuyers will have to become more disciplined in their savings habits. In a situation where people are being encouraged to stay at home, make the most of it by spending as little as possible and saving as much of a deposit as you can,” he said.“Lenders will be looking at your spending patterns in the three months before you apply for a home loan, so the less you spend, the greater your serviceability will be.”He also recommends being mindful of your credit score. Making too many credit applications can signal to lenders that you're reckless with your finances, which could jeopardise your chances at securing a loan.“Don’t apply for credit cards or personal loans, and even when you’re looking for a home loan, avoid making inquiries with too many lenders. Do your research upfront and only apply to a few once you’ve narrowed down your search,” Jovcevski said.For an overview of home loans currently available, visit or home loans comparison page, or browse the selection below.

First home buyers eager to snag bargains as property prices drop

Thursday, 16 July 2020

Times may be tough, but first home buyers aren’t giving up on their property ownership dream just yet. New research shows that over half of these Australians plan to make a purchase in the next 12 months.ME’s latest Quarterly Property Sentiment Report released today found 51% of first home buyers want to have joined the property market by mid next year, up from 42% last quarter. And they’re the most eager of the bunch, with the report revealing that, by contrast, only 39% of investors and 22% of owner-occupiers share those same intentions.Among first home buyers, the vast majority are looking to get their foot in the door by taking advantage of property price drops due to COVID-19. In fact, 82% of first home buyer respondents said they’re keeping their eyes peeled for bargain properties for sale, compared to 66% of investors and 57% of owner- occupiers.These findings are based on surveys with 1,000 Australian homebuyers in June, when COVID-19 restrictions first began to ease across most states and territories. ME’s general manager of home loans, Andrew Bartolo said the surge in first home buyer enthusiasm could be due to a number of factors.“First home buyers may be looking to find the silver lining in the current economic climate, thanks to greater potential for property price falls, record low interest rates and government support,” he said.

Building a home: What are the hidden costs?

Thursday, 16 July 2020

Building a home can be an enticing option for many Australians, but there are plenty of unforeseen costs that can come into play. What comes included in a contract for one builder might be an optional extra for another, and there’s always the chance the overall price ends up several thousand dollars more than expected. Below are just a few things to keep in mind when drawing up your budget.

St.George reduces Lenders Mortgage Insurance to just $1 for first home buyers

Monday, 13 July 2020

St.George today announced it will be helping Australians kick off their property journey sooner. Effective today, the bank will lower Lenders Mortgage Insurance to just $1.00 for eligible first home buyers with a Loan to Value Ratio of up to 85%.Typically, home buyers who have saved up a deposit of less than 20% of a property’s value will have to purchase LMI, which can cost thousands of dollars. The move from St.George will give those with a deposit of 15% a chance to keep that money in their pocket.To be eligible, you’ll need to be a first home buyer taking out an owner occupier, principal and interest loan of up to $850,000 (meaning the maximum value of the home will have to be $1,000,000).St.George General Manager Ross Miller said first home buyers face a number of challenges ahead of their property purchase, though many are in a stable enough position to make home loan repayments.“We are seeing many pain points experienced along that savings journey, including giving up holidays, reducing entertainment expenses, having to move back home with parents, moving in with friends or even leaning on family members to help top-up savings,” he said.“By reducing the expense of Lenders Mortgage Insurance, first time purchasers may be able to afford a property that meets their needs sooner and save thousands of dollars.”RELATED: One third of Aussie millennials plan to buy a home by 2022While present economic conditions haven’t been favourable to many, they have opened up opportunities for those with sights on the property market, who have been heartened by record low home loan rates and steadily dropping property prices.In fact, research from St.George found that one in 10 Australians looking to buy a home are doing so for the first time, and the COVID-19 pandemic has made saving for that goal a priority for one third of Australians.“Australians have spent more time at home than ever before during the COVID-19 restrictions, and we are seeing a bigger trend in how the nation is re-evaluating their current living situation. For example, three quarters of people would now prefer to live in a house over an apartment,” Miller said.“First home buyers are calling for new ways to achieve their home ownership dreams sooner, and this option is designed to help make that goal within closer reach, particularly with the added benefit of a record low interest rate environment.”For more information, browse our St.George home loans page. And to see how the home loans on offer stack up against others on the market, head over to our home loans comparison page, where you’ll be able to filter your search by rate and type.