subscribe to our newsletter

Nationals MP calls for deposit-free home buying

A federal government MP has suggested that housing could be made more affordable for first home buyers in Australia if banks would waive the need for a deposit for those with a three-year rental history.

Nationals MP Andrew Broad, the member for Mallee, has floated a proposal to government that would allow renters to buy a home without paying a deposit, if the money they normally spent on rent was commensurate with a mortgage repayment.

The suggestion, which comes as assistant minister to the treasurer Michael Sukkar begins formulating the Turnbull government's housing affordability policy, aims to make property ownership in Australia more achievable for first home buyers.

Speaking to SBS Arabic 24 on Tuesday, Mr Broad said: “We’re having these discussions at the moment. We must do something to help people achieve home ownership. If you help the average person to become more wealthy, turn a person from renting to home ownership, [then] the more citizens that are wealthy, the wealthier the country is. So, it is in our national interest to provide assistance in this area.”

The MP said that he had thought of the idea after speaking to a lady from Mildura who had “applied to 100 houses to rent”.


He revealed: “She was struggling financially, but she had managed to be a perfect renter for three years, and in the regional town she was living in, the repayments on a new house would have actually been less than what she would have paid to rent a house”.

“She said: ‘I have the capacity to make repayments, why can’t the bank take that into consideration?’ That got me thinking. If that was the case and I did the figures... Provided your rental history repayment schedule is somewhere near what you would be paying, why shouldn’t we provide a vehicle to help people achieve home ownership?”

Mr Broad said that one of the ways such a policy could work would be to make it “a requirement of the banks to implement this policy as a return of favour for us being guarantors of the banks in the global financial crisis”.

Another option would be for government to “take an equity share or provide some sort of mechanism to assist people to get a product such as this and work with the banks to develop such a product”.

Noting that this type of mechanism wouldn’t work for all renters, Mr Broad said that “there would be so many Australians for whom it would succeed”.


“This policy tends to work better in the more regional areas, where rental returns are closer to repayment schedules… certainly in the outer suburbs in a lot of our inland cities a policy like this would work, but you’ve got to be able to prove to the bank that you have the capacity to pay.”

He concluded: “The two things that government should be focused on is ensuring that Australians can have a job and that they can afford to buy a house. And if you achieve those two things it gives people a level of certainty, it builds a home, and it actually takes away a lot of the social problems that costs the government so much money.”

Assistant minister Michael Sukkar has suggested that while Mr Broad's proposal was improbable because a bank would likely not lend money “without assurances”, he has revealed that the government was looking at a model similar to Britain’s rent-to-buy scheme, which typically offers new housing stock to lease at 20 per cent below the market rate, with the understanding that renters will use the savings to amass a deposit to buy the property within 10 years.

Mr Sukkar said the coalition had no plan to reduce the capital gains tax discount, despite several calls to do so to improve affordability for first home buyers.

Nationals MP calls for deposit-free home buying

Are you a new-to-industry broker in the process of growing your business? Then there’s some great news: The Adviser’s New Broker Academy is back in 2021 and will provide you with essential insights into cutting-edge tools, strategies and processes to fast-track to success. Don’t miss your chance to attend. To secure your FREE place, visit newbroker.com.au now!

Annie Kane

Annie Kane is the editor of The Adviser and Mortgage Business.

As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts. 

Contact Annie at: This email address is being protected from spambots. You need JavaScript enabled to view it.

Latest News

A high rate of loan repayments through the pandemic has somewhat slowed the growth of Heritage Bank’s book, despite a surge in approvals. ...

Small and medium-sized enterprises were the most commonly targeted victims of cyber attacks in the last financial year, according to new rep...

An overwhelming majority of Pulse Credit Union members have supported the proposed deal with Teachers Mutual Bank Ltd, with the two companie...

Join Australia's most informed brokers

Do you know which lenders are providing brokers and their customers with the best service?

Use this monthly data to make informed decisions about which lenders to use. Simply contribute to the survey and we'll send you the results directly to your inbox - completely free!

How long do you think it should take to discharge a mortgage?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.