ABC News Daily Why Alan Kohler loves 5% home deposits
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Aug 28, 2025 Alan Kohler, ABC's finance expert, passionately discusses the government's expanded 5% deposit scheme for first home buyers in Australia, easing the barriers of traditional 20% deposits. He highlights how this initiative opens doors for young buyers amidst soaring house prices. The conversation delves into its potential impact on housing demand and property prices, plus the complexities of construction regulations. Kohler's insights reveal why he believes this scheme could be a game-changer for many aspiring homeowners.
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20% Deposits Are Often Unaffordable
- Saving a 20% deposit is increasingly unrealistic as median house prices hit around $1.2 million in Sydney.
- Alan Kohler explains 20% can take over a decade to save for typical earners at past saving rates.
Purpose Of Lenders Mortgage Insurance
- Lenders mortgage insurance (LMI) was created to protect banks if borrowers defaulted.
- Alan Kohler says LMI's role is to pay the shortfall when a repossessed home sells for less than the mortgage.
Use The 5% Deposit Scheme
- The government expanded a 5% deposit scheme to all first-home buyers and will cover mortgage insurance.
- Use the scheme to enter the market sooner if you qualify as a first-home buyer.