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Concerning news for Victorian first home buyers this week reveals nearly 30 per cent of Victorians currently eligible for the state’s Homebuyer Fund would no longer qualify for the federal government’s proposed Help to Buy scheme as a result of stricter income limits and reduced property price caps.
A report from the Parliamentary Budget Office (PBO) has revealed that 668,800 Victorian residents – representing 29.4 per cent of those currently eligible for the state-funded Homebuyer Fund – would not be able to access the federal government’s Help to Buy scheme.
The proposed scheme reduces income limits significantly—from $216,245 to $90,000 for single-parent applicants, and from $216,245 to $120,000 for joint applicants. In a market that is already hard to break into, this cod be a disaster for many.
In this week’s newsletter, we look at how buy now pay later schemes such as Afterpay can impact a home loan application.
Buy Now, Pay Later (BNPL) services like Afterpay can be convenient for spreading out payments on purchases. But if you’re planning to apply for a home loan, it’s important to understand how these services can impact an application.
When you use BNPL, it shows up on your credit file or bank statements, and lenders take that into account when assessing your financial habits. Regular use of BNPL might suggest to lenders that you’re relying on borrowed money to cover everyday expenses, which could make them question your ability to manage a mortgage.
Even though BNPL doesn’t always feel like “real” debt, it’s still considered a form of borrowing. If you miss a payment, it could hurt your credit score, and any ongoing BNPL payments will be factored into your overall financial commitments. This might reduce how much a lender is willing to let you borrow.
Are buy now pay later schemes regulated?
Buy Now, Pay Later (BNPL) schemes are currently less regulated compared to traditional credit products like loans and credit cards.
In Australia, BNPL providers are not required to comply with the National Credit Code, meaning they don’t have to perform comprehensive credit checks or assess affordability. However, consumer protection laws still apply, and regulators like ASIC monitor the industry for unfair practices.
Some countries are introducing stricter rules, including affordability assessments and transparency requirements, to ensure consumers are protected. As the BNPL market grows, regulation is evolving to address potential risks to financial stability and consumer welfare.
Variable
The rates below are based on a $500,000 loan, with the borrower making principle and interest payments with a loan term of 30 years. The rates quoted may vary depending on the borrowers LVR.
1 Year Fixed
The rates below are based on a $500,000 loan, with the borrower making principle and interest payments with a loan term of 30 years. The rates quoted may vary depending on the borrowers LVR. At the end of the three year fixed period, the borrowers interest rate will revert to a standard variable rate for the life of the loan.
