Media Release: Housing Minister Missing in Action as MyHome Critical Questions go Unanswered
Housing Minister Missing in Action as MyHome Critical Questions go Unanswered:
Review of MyHome Program Needed
18 July 2024
Independent for Nelson Meg Webb MLC said today the Government is missing in action over its MyHomes shared equity scheme in light of the many urgent questions which remain unanswered.
“I reiterate my call for a full review of the Government’s MyHome Scheme,” Ms Webb said.
“I stand by the questions I’ve raised which are based upon people’s lived experience when they have sought to enter this program.
“Where is the Government on this? It is very telling that the responsible Minister has ducked for cover and is leaving Bank of Us to respond, which is leaving many critical questions unanswered.”
Ms Webb said the Government touts the MyHome scheme as benefiting low income earners to help them access affordable housing.
“Why then is the MyHome scheme charging premium interest rates out of all the different housing products offered by Bank of Us?
“The only option available to MyHome clients is the FlexiChoice MyHome rate of 6.86%pa, current as of this morning, which is the highest variable rate.
“The Minister set the tender parameters for the lender. Therefore, the Minister needs to explain what is the justification for charging a premium interest rate to MyHome customers?
“What other customers of Bank of Us are charged this rate?
“If there is no difference in the features offered between the FlexiChoice MyHome loan and the standard Flexichoice Investment loan offered by Bank of Us why is the rate higher?”
Ms Webb asked why MyHome participants are not able to choose another loan type?
“It is extraordinary there no competition offered in this space in relation to obtaining bank finance.
“While it was heartening to hear Bank of Us now state that borrowers can choose more frequent repayment options rather than monthly, that hasn’t been the experience of Tasmanians taking out these loans.
“It is also important to realise that offsets are only good for people who have extra cash lying around to offset against their loan, which isn’t necessarily the case for most Tasmanians struggling with cost of living pressures.
“Some Tasmanians accessing the MyHomes scheme may determine that a Bank of Us loan product with a lower interest rate is their best option, but currently they’re locked out of making that competitive choice – why?”
Ms Webb also called for Government to release its MyHome scheme tender Brief and detail the criteria for, and basis on which, the government selected the Bank of Us as the sole successful participant.
“The Minister has still refused to explain why they have established a virtual monopoly for the MyHome scheme and we need transparency over the tender process.
“This is not just a monopoly provider that’s been established, it is a monopoly that is offering only one product for MyHomes’ clients.
“It is important to note that MyHome is very low risk to Bank of Us. It is my understanding that less than 80% of the value of the property is being financed and as low as 60% in some cases.
“This means the financial lender can never make a loss in the case of a forced sale as they are first mortgagee meaning their loan gets paid out first, then Homes Tasmania gets their share.
“A full review may answer that question and also consider whether there are benefits for the Tasmanian consumer to include another financial lender in the mix to provide some competition, something Liberal governments tend to leap at.”
