Home Equity Access Scheme

Question

Senator RUSTON: Were there any circumstances where-I'm sure we've probably had situations since this scheme has been operating where people have passed away with a debt. Have all of those debts been able to be easily recovered following the death of the borrower? Mr Flavel: I'll take on notice whether all of them have. But, of course, it's being taken out against an asset, and there are provisions around both how much you can borrow and, as you get older, a kind of a loan-to-value concept. These are all protections that ensure that, in all circumstances, people are going to have positive equity when it comes to that circumstance of going through the estate in order to discharge any liabilities they have under the scheme. Senator RUSTON: If there's any further information, I understand the sensitivity of talking about these issues. Also, in terms of the No Negative Equity Guarantee, has there ever been a situation where that has needed to be exercised? Mr Flavel: I don't think so. I'd refer back to what I said earlier-that the average loan balance is $36,000. If you think about where median residential dwelling prices are, most people on average are borrowing a tiny-a small-proportion, on average, of what the underlying equity in the housing wealth will be. Senator RUSTON: So, no, it's very low risk in terms of the provision of that- Mr Flavel: It was there for an important reason-to give people confidence that they can access the scheme. I'm not aware that has been invoked, but I'm happy to check that.

Answer

Please see attached answer.

Documents

• Question with answer (PDF) (opens in a new tab)
• DSS SQ26-000738.pdf (opens in a new tab)