Deposit Scheme Frenzy – What It Means for Mortgage Brokers
The Courier Mail’s report on the shock price surge sparked by the expanded Home Guarantee Scheme reads like déjà vu for many of us in the industry. Once again, well-meaning government policy collides with market psychology, and the result is predictable: FOMO-fuelled property inflation.
For mortgage brokers, these conditions present both opportunities and risks. The sharp movements in property values, coupled with heightened buyer demand, are reshaping client conversations—and not always in ways that serve borrowers’ long-term interests.
The Good News for Brokers
The current frenzy means enquiry volumes are up. Thousands of first-home buyers are suddenly eligible, and in a market where “fast finance” can win or lose a deal, brokers are central to getting clients over the line.
- Higher demand for advice: With buyers panicking, brokers become a calming force, helping clients navigate funding limits, borrowing capacity, and responsible lending.
- Rise in pre-approval demand: Brokers able to deliver quick, streamlined pre-approvals will attract more clients as competition for properties intensifies.
- Client loyalty opportunities: First-time buyers, once secured, often become long-term customers. Helping them into their first property under the scheme could create relationships for life.
- Cross-referral potential: Market chaos is driving buyers toward brokers, but also property buyers’ agents, accountants, and conveyancers. Brokers who network effectively can embed themselves more firmly in this ecosystem.
The Downsides and Risks
But let’s not sugarcoat it—the environment poses serious challenges:
- Negative equity risk: Clients buying at inflated prices with 95% loans are exposed. A dip in values could push them underwater, raising hardship and arrears risks—and reputational risks for brokers.
- Affordability concerns: Interest rates remain volatile, and many “panic buyers” will head straight into mortgage stress if repayments spike. Brokers must walk a fine line between facilitating finance and protecting borrowers from over-stretching.
- FOMO-driven decisions: Buyers purchasing sight unseen or without independent valuations risk regret. Brokers caught in the emotional rush may face complaints down the track.
- Compliance pressure: With an uptick in high-LVR lending, the spotlight on responsible lending obligations grows sharper. Brokers will need bulletproof notes and justifications for every recommendation.
How Mortgage Brokers Can Capitalise
The smartest brokers won’t chase volume alone—they’ll position themselves as trusted financial guides when emotions are running high. Practical strategies include:
- Educate, don’t just transact: Run client webinars, social posts, or newsletters explaining risks of FOMO and how to buy smart while still leveraging the deposit scheme.
- Promote long-term planning: Encourage customers to factor in possible rate rises, lifestyle changes, and emergency buffers.
- Offer speed and certainty: Position your brokerage as “auction-ready,” with rapid approvals, close lender relationships, and scenario planning.
- Differentiate on responsible lending: Make it a selling point that you won’t just push clients into debt—they’ll buy with eyes open, backed by your advice.
- Monitor refinancing opportunities: Buyers who overpaid today may need to restructure tomorrow. Keeping touch points open will generate repeat business.
Final Word
Government schemes often come with unintended consequences, and this one has turbocharged buyer demand without addressing the root issue—supply. For brokers, the wave of first-home activity is both a gift and a trap. Handle it right, and brokers can cement their role as indispensable advisors in a volatile market. Handle it wrong, and clients may be left with negative equity, financial stress, and complaints.
Our role isn’t just to write loans—it’s to steady hands in a frenzy.
