The Federal Government's 2009 Budget has generated optimism in the property market thanks to a $22 billion infrastructure program and extension of the First Home Owner's Grant.


Both initiatives are considered as positive steps in the move to stimulate our economy and give first home buyers a foothold in the housing market.

From the first of next month (1 October 2009) will see a significant reduction in the boost, down from $21,000 to $14,000 for the purchase of a new home and down from $14,000 to $10,500 for the purchase of an existing home. From January 1, 2010, the Home Owners Boost will no longer be available but the $7,000 First Home Owner Grant will continue.

It's a second chance for those who haven't already taken advantage of the First Home Owner Boost. As your mortgage broker we can assist you with your application and advise you of any state-specific entitlements you may be eligible for.

The Boost has already achieved considerable success in encouraging activity in the housing market and the extension is expected to help thousands more new home buyers.

Similarly the $22 billion Building Australia Fund is hoped to give a push-start to the building and construction industries, in turn supporting employment and improving the accessibility and supply of housing.

The news that the budget deficit may hit a record $57.6 billion in 2009-10 paints a sobering picture of the tough times ahead and emphasises the importance of any moves to prop up Australia's property market in a way that positively impacts jobs, housing and consumer sentiment.

While interest rates remain low, it pays to stay ahead of your minimum monthly repayments by using a redraw facility or offset account.


Since mortgage rates have dropped, nearly one in three suburban families continue to make more than the minimum required monthly home loan repayment*, a choice that will save years off their mortgage and thousands of dollars in interest.

Borrowers who are tempted to lower their repayments and put the money into a savings account should keep in mind that savings are taxable and paying off the mortgage is not.

If you are able to do without the additional funds, redraw and offset accounts offer a convenient place to store money that you can still access for a rainy day. For as long as you have extra funds in your mortgage you have the security of knowing you have a buffer to cope with hard times as well as the financial stability to weather any future interest rate rises.

What is a redraw facility?
It is a way of making additional repayments on your mortgage and then having access to this money again when you need it, such as for a new car or holiday.

Redraw is offered as a feature of most home loan products, with fees and conditions varying from one lender to the next.

What is an offset account?
It is a savings account that is connected to your home loan, where you deposit money into it and use it to pay off your bills and daily expenses. You don't earn interest on the money sitting in your offset account; instead the balance is offset against your mortgage amount.

Like redraw, offset accounts differ in their fees, terms and conditions. Some are fully offset (100%) while others are only partially offset and may be conditional on a minimum account balance or withdrawal amount.

As your mortgage broker we can advise you of the suitability of different lenders' redraw and offset accounts. Contact us to discuss the best option for your needs.

* May 2009 Mortgage Stress-O-Meter, Fujitsu Consulting.

When you take out a home loan you want the peace of mind to know you are dealing with a broker who has demonstrated knowledge, experience and integrity.


It's with this in mind that the federal government has introduced the National Consumer Credit Protection Bill 2009, which puts in place new national responsible lending laws for all consumer credit.

While strong consumer protection standards already exist in the mortgage industry, consistency varies from state to state. This is the first time Australia will have one national, standard system of regulation.

Under the legislation, both lenders and brokers will need to be registered with ASIC by the end of this year and apply for an Australian Credit License by 30 June next year. It is a condition of holding a license that lending is done responsibly - extending credit to a consumer that is unsuitable based on their needs and financial capacity will become an offence. Licensees must also be members of an external dispute resolution scheme.

In practice little will change for brokers who are members of the MFAA industry body and already adhere to code of practice standards, but it is good news for the industry as it will weed out unscrupulous operators and ban them from operating across all states of Australia.