Subsidised equity scheme offers interest-free mortgages
Subsidised equity scheme offers interest-free mortgages for chosen homebuyers
About 50 Christchurch households over three years could benefit from a new scheme offering subsidized home deposit top-up loans in return for an equity share.
The scheme, funded with just over $3 million each from the city council and Government, is aimed at helping those unable to save a deposit but with incomes too high for other subsidies.
However, it has been labelled by critics as a "lottery" and "middle-class welfare".
Those chosen for the initiative will get an interest-free second-mortgage towards a home deposit, which they will have up to 15 years to repay. If a home sells before the loan is repaid, the scheme takes a share of the capital gain on top of the outstanding loan amount. If a home sells for less than the buyer paid, the scheme will suffer a share of the loss.
Article from Stuff.