The industry has rallied behind a plan to allow first homebuyers to access their superannuation for a deposit.

HomeStart chief executive John Oliver told a Senate Economics References Committee meeting this week that Australia should implement a scheme similar to one in Canada which allows Canadian first homebuyers to access up to $25,000 for a deposit, and high-profile independent Senator Nick Xenophon has said he will move to support the idea. Now mortgage broking industry figures have applauded the plan.

Mortgage Choice chief executive Michael Russell said the franchise brokerage had long called for a similar scheme in which first homebuyers could access their super for a housing deposit, reducing the need for LMI.

"While Lenders Mortgage Insurance has a crucial role to play in assisting first homebuyers into the property market, if the premium can be reduced by lowering the Loan to valuation ratio, then this would seem to be in the best interests of buyers. First homebuyers should be allowed to invest part of their super in their own bricks and mortar,” Russell said.

Russell said the scheme should be put in place with the stipulation that the money will be reimbursed to the buyer's super account either at the sale of the property or within 15 years, whichever comes first.

1300HomeLoan managing director John Kolenda also voiced his support for the plan, saying it could be a boon to first time buyers, provided the proper stipulations were put in place.

The plan from Senator Xenophon deserves consideration and they can set parameters around it such as a maximum withdrawal from a super fund of $25,000," he said.

Kolenda predicted that the plan could benefit not only the housing industry, but the superannuation system as well.

“If first time buyers are allowed to access their super for a home loan deposit you might actually see people contributing more money into their fund, which will be beneficial to the superannuation sector.”