Misconceptions surrounding housing loans in the Northern Territory have been set straight by the territory’s minister for housing, Peter.
Mr Chandler clarified the details of the HomeNorth housing loans, explaining that the government would be re-aligning some existing loans to create fairness across the 1,144 existing government home assistance loans.
“This means we are now linking 293 HomeNorth loans to the Commonwealth Bank’s variable rate to fit with the other government home loans, and not the Reserve Bank of Australia cash rate, plus a margin,” Mr Chandler said.
The 293 loan holders - a pocket of borrowers between July 2004 and June 2009 - have enjoyed a 4.99 per cent rate compared with other borrowers paying around 6.6 per cent.
The loan holders will now pay an average of $43.30 more a week at the linked variable rate of 6.6 per cent, but are free to shop around.
Mr Chandler said that most of these loans are around $140,000 and in many cases, the loan holders enjoyed significant capital gain for their properties.
“Fifty seven of the loan holders do not live in the home, so they no longer require the government loan assistance”.
According to Mr Chandler, the government needed to review its assistance on a regular basis to ensure it is aimed at the right people.
“The change we have made will act as a driving mechanism to get people to take a look at their loan financing and consider alternatives,” he said.