Lenders’ mortgage insurance specialist Helia Group says the Labor government’s proposed Home Guarantee Scheme changes are counterproductive to making home ownership more accessible.

The home loan guarantee extension would let more first-time buyers make 5% deposits without having LMI in place. The Insurance Council of Australia has warned this could have a “severe and irreversible” impact on a well-functioning insurance market.

Helia says the planned changes to income and property price limits and an uncapped number of places are likely to significantly expand the program among first home buyers, who made up 25%-30% of Helia’s gross written premium last year.

“The proposed policies ... introduce unnecessary risk to the stability of the financial sector. Helia will engage with government with the aim of seeing the policy modified to ensure an ongoing vibrant LMI industry.”

Helia’s first-quarter GWP was $51 million, up from $38.4 million a year earlier, driven by more mortgages above the 80% loan to value ratio, plus increased market share.

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