THE FEDERAL GOVERNMENT’S ACTION ON MORTGAGE HOLIDAY IS TOO GOOD TO BE TRUE
The Federal Member for Berowra, Philip Ruddock today cautioned constituents to read the fine print on new announcements by the Federal government promising mortgage holidays for people and families who lose their job.
“The Opposition commends the banks for taking a proactive approach for clients who have found themselves in trouble, however there is no such thing as a free holiday from the banks. There will be clear and sensible limits to what the banks have announced and only a few will benefit.
“The Government needs to be up front about these new mortgage measures from the banks as these options will not be available as a right to anyone who loses their job. They will only be extended by the banks where they are prepared to carry the risk.
“The Government is misleading in their comments and potentially very risky, creating false hope amongst those who are already struggling, and will struggle as unemployment rises,” Mr Ruddock said.
The new bank measures, which include capitalising interest, increase the risk of negative equity which has been a major problem overseas. People who take on these options will end up with a greater debt and higher repayments at the end of the day.
The non bank lending sector is critical to retaining competition in our home mortgage market and they are already struggling to compete with major banks during the economic downturn.
“It is critical that all constituents, including those looking to buy homes for the first time continue to exercise sound judgement about what they can and cannot afford and the commitments they take on,” Philip Ruddock said.