Three steps to protect your home loan from a falling market

August 8, 2026 — 5:01am

You have reached your maximum number of saved items.

Remove items from your saved list to add more.

Directly after the federal budget on May 12, I began my column with the words: “Didn’t anybody drafting last week’s budget think of the 95 per cent first home buyers?”

The budget – and its controversial tax changes – was ostensibly about helping younger Aussies onto the housing ladder by removing the artificial property inflators of negative gearing and the capital gains tax discount. It was meant to suppress the property market.

The problem was that this was just after the government enticed a whole heap of first home buyers into the market… with just 5 per cent deposits.

In my post-budget piece, I wrote: “In October last year, the government pulled the trigger – three months early – on a hugely expanded Home Guarantee Scheme, which allows first home buyers to purchase with a 5 per cent deposit and avoid expensive lenders’ mortgage insurance.”

This is usually payable below a 20 per cent deposit but, under the scheme, the government goes guarantor for 15 per cent of your property so you can avoid that insurance, which is often tens of thousands of dollars.

But, as I wrote: “After paying your 5 per cent, leg-up-onto-the-ladder deposit, you take on a debt that is rungs and rungs higher than you otherwise might: 95 per cent.”

Prices will, ultimately, start rising again. It’s just a matter of riding it........

© The Sydney Morning Herald