New Zealand government-issued 2% 30-year loans to first home buyers would cost taxpayers $0.3-1.5bn annually.

Susan Edmunds addresses a question about the feasibility of the government issuing 2% 30-year loans to first home buyers. She explains that New Zealand banks don't offer similar loans due to the country's small economy and difficulty managing interest rate risk for banks. Introducing government-issued home loans would be costly for taxpayers; assuming a 4% long-term borrowing rate for the government, it would cost approximately $0.3bn annually, rising to $1.5bn per annum after five years.

July 05, 2024
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