Westpac has signed its subsidiaries St.George Bank, Bank of Melbourne and BankSA onto the federal government’s Home Guarantee Scheme (HGS).
Eligible home buyers with a deposit as little as 2% (Family Home Guarantee) and 5% (First Home Guarantee and Regional First Home Buyer Guarantee) can now apply for a home loan through the banks without paying Lender’s Mortgage Insurance (LMI) as part of the initiative.
The banks join a growing panel of over 30 lenders who are authorised to participate in the scheme.
Westpac managing director of mortgages Richard Burton (pictured above) said the move was “great news for aspiring homeowners”, with new Westpac research showing that cost-of-living and affordability challenges have not dampened home ownership ambitions.
Westpac’s latest Home Ownership Report has revealed one in five (20%) Australians are planning to buy a first home in the next five years, which is broadly in line with figures from late 2020.
This trend is largely being driven by Gen Z. Amongst this group, 44% intend to achieve home ownership in the next five years, with Millennials only slightly behind at 32%, Gen X at 14% and Baby Boomers at 2%. And one in 10 (11%) Gen Z’s plan to buy in the next 12 months, more than double the national figure of 5%.
“It’s encouraging to see that despite the higher cost of living and other affordability challenges, younger Australians are still the most driven in wanting to purchase a home and are taking steps to prioritise this goal,” Burton said.
“Through expanding access to the Home Guarantee Scheme, St.George, Bank of Melbourne and BankSA will be able to help more Australians into the property market sooner with a smaller deposit,” he said.
Westpac said it had helped more than 1000 Australians purchase their home through the HGS since Westpac joined the panel in July this year.
“We’ve heard some amazing stories about the difference it’s making for these customers in terms of accelerating their home ownership journey,” said Burton.
“That’s why we’re keen to let prospective customers know about initiatives such as the Home Guarantee Scheme, as they can make a real difference to helping people into homes sooner.”
From July, eligibility criteria for the scheme – which includes the First Home Guarantee, the Regional First Home Buyer Guarantee, and the Family Home Guarantee – had been expanded.
Friends, siblings, and other family members will be eligible to jointly apply in pairs under the First Home Guarantee and the Regional First Home Buyer Guarantee.
Joint applications for these guarantees had previously been restricted to people that were married or in a de facto relationship, in addition to single applicants.
These guarantees have also been expanded to non‑first home buyers who haven’t owned a property in Australia in the last 10 years.
There are 50,000 places available under the scheme up from 35,000 last year.
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