MEMBER for Mallee Andrew Broad has called for an alternative to cash deposits in order to help improve Australia’s housing affordability.
In Melbourne’s housing market, buyers are being asked to raise a deposit of about 20 per cent of the house price to secure the mortgage.
In many cases, first home buyers are required to save up $120,000 before taking out a loan.
Mr Broad told the ABC on Thursday that long-term renters should be able to use their financial history to secure a loan.
Under Mr Broad’s proposal, first-time home buyers would be able to submit three years of rental receipts instead of a deposit.
"I think it has serious potential," he said.
"Essentially what a bank needs to do is see that a person has the capacity to service a loan.
"What a government needs to do is make sure a person who wants to purchase their first home can get into the property market."
Horsham’s median house price is about $245,000, which would require less than a $50,000 deposit if a bank asked for 20 per cent upfront.
The senate ran a two-year inquiry into housing affordability that was widely mocked when the government’s committee members made no recommendations on how to solve the issue.
Mr Broad’s suggestion was met with both praise and criticism on social media.
Mr Broad had a lengthy argument with one twitter user on Friday morning, who said the scheme would not work as rental payments were usually less than mortgage repayments.
“I've been invested in property for 20 years, I can do math,” Mr Broad said.