Widen access to 5% home deposits
Raise the First Home Loan income cap to $300,000, keeping the lender’s affordability test for a 5% deposit.
Our assessment & details
Our assessment
AnalysisStrengths
- Widens access to an existing low-deposit scheme while retaining lenders' affordability checks, addressing the deposit hurdle for more eligible buyers.Evidence
Trade-offs & risks
- A 5% deposit means a larger loan for the same home. Borrowers still pay mortgage-insurance costs and must meet lending requirements.Evidence
Open questions
- When would the expansion start, and what fiscal period does the $4–6m estimate cover?Evidence
Party proposal
National would raise the First Home Loan income cap to $300,000 for all applicant types. Eligible buyers could use a 5% deposit, while lenders would still decide whether they can afford the mortgage.
- Who it covers
- Eligible first-home buyers within the proposed income cap. A smaller deposit does not remove the lender’s affordability test or guarantee approval.
- Timing
- Proposed for a re-elected government; no implementation date is specified in the reviewed sources.
- Cost & funding stated by the party
- The party paper estimates a fiscal impact of $4–6 million, funded from existing budgets. It does not specify an annual or multi-year period for that estimate.
Sources reviewed
National: First Home Loan access Policy page · Publication date not stated
National: first-home buyer policy (PDF) Policy paper · Publication date not stated