Page 1104 - Week 04 - Wednesday, 20 March 1991
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I will now describe the new administrative arrangements for managing loans. These will be incorporated in a new Commissioner for Housing loans scheme. The new scheme will be known as the HomeBuyer housing assistance program and will be gazetted on, and operate from, 2 April. It will bring all existing and future mortgagors under the one assistance program.
The gazetted program has been drafted so that it complies with the Commonwealth-State Housing Agreement provisions by ensuring that all subsidies are recovered, except in cases of individual hardship. Loan repayments are income geared; and single applicants are afforded the same access as other applicants to home purchase assistance. It will also include provisions for appeals and information privacy which do not exist in the present loans schemes.
With the gazettal of the HomeBuyer program, the clauses in the 1983 and 1986 Commissioner for Housing loans schemes will mirror the assistance, appeals and information privacy provisions in the HomeBuyer program. The 1930 scheme will be abolished and these mortgagors will receive assistance under the HomeBuyer program.
For existing mortgages, no retrospective changes will be made to previous assistance levels which were handled under the then conditions. The only changes are prospective. There are changes in other respects for those mortgagors who obtained loans under the 1930 and 1983 schemes where the portion of the monthly mortgage instalment that exceeded 25 per cent of a mortgagor's income was waived. It will now be deferred temporarily and will be recovered in full as soon as the mortgagor can afford it. The change for those mortgagors who obtained loans under the 1986 scheme is that the deferred payments will be temporary and will be recovered as soon as the mortgagor can afford it.
Interest rates on loans where loan applications were submitted prior to 1 August 1990 will remain at 13.5 per cent. Interest rates on loans where applications were submitted on and after 1 August 1990 will continue to be at the rate charged by the Commonwealth Bank for owner occupied home loans, currently 14.5 per cent. Those mortgages that allow higher interest rates to be charged where the property is not occupied by the mortgagor will attract a higher charge that is equal to the rate charged by the Commonwealth Bank for investment properties, which is currently 16.25 per cent.
The important feature of the HomeBuyer program is that it now provides for a maximum loan repayment equal to 27 per cent of a mortgagor's gross income. This is above the current ratio of 25 per cent. However, the higher ratio, together with the practice of assessing an applicant's payment capacity over the term of the loan, will improve the borrowing capacity of the lower income earners and ensure that they have access to affordable home loans. In
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