South Australian home buyers will have access to more affordable loans after the State Government announced extended criteria and a higher loan limit for Advantage Loan borrowers.
In a bid to improve home loan affordability, the State Government and HomeStart have expanded the criteria on their Advantage Loan, increasing the maximum amount that could be available to homebuyers by 50 per cent from $30,615 previously to $45,000.
The Advantage Loan, introduced in 1993, is combined with another HomeStart loan to increase the amount customers can borrow without changing their monthly loan repayments.
Housing and Urban Development Minister Tom Koutsantonis said the changes to the Advantage Loan were another example of the State Government taking the lead in addressing housing affordability.
“This loan significantly helps the people that need it most,” said Koutsantonis.
“Increasing opportunities for families to buy their own home is pivotal to the State’s housing and construction industries and our priority through HomeStart is to improve affordability for a range of homebuyers.”
HomeStart CEO John Oliver said despite low interest rates, affordability is a key issue for South Australians.
“It’s crucial that we look at ways to remove some of the barriers to ownership and get people started sooner,” said Oliver.
“To do this we’ve expanded both the income eligibility criteria as well as the amount applicants can borrow. The amount that an Advantage Loan applicant is eligible to receive is based on income, with the loan amount they qualify for reducing as their income rises.
“The Advantage Loan also has a subsidised interest rate equal to inflation, with no repayments due until the standard loan is repaid.
“This unlocks a greater number of purchase options - for some it could be the difference between living closer to the city or in a location closer to schools and better amenities.
“Our research shows that a home buyers' suburb choice can expand by as many as 32 suburbs with the Advantage Loan.
“For others it might be just buying a home with an extra bedroom or a bigger yard than they could have afforded originally.”
Oliver said the Advantage Loan was initially introduced to specifically help single income families, but HomeStart recognised that a broader range of home buyers on average incomes would benefit from the loan.