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ISCOVER
Staff Reporter
One industry stakeholder is forecasting a sharp increase in the popularity of parent equity home loans.
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According to 1300Home Loan managing director John Kolenda, when government subsidies for young home buyers – such as the Victorian government’s first-home bonus – are removed, the number of parent equity loans will spike.
“Mortgage equity home loans have become steadily more common in recent years as housing affordability has deteriorated and that is likely to snowball as various state governments reduce their support for the real estate industry,” he said.
“These loans have many benefits including allowing children to avoid expensive Lenders Mortgage Insurance that is paid by borrowers - often young people - with low equity.”
In Victoria, the State Government’s first home bonus of $13,000 and its $6,500 regional bonus for first time buyers will end on June 30.
In South Australia, a grant of $8,000 for first homebuyers will be halved to $4,000 from July 1 and abolished from July 1, 2013.
