Boost for first-home buyers

WESTPAC-owned St George Bank is attempting to lure firsthome buyers by reducing the required deposit amount and slashing lenders’ mortgage insurance to virtually nothing.

Effective Monday, the regional bank will let first-time home lenders access funds with only a 15 per cent deposit instead of the traditional 20 per cent requirement.

It has also reduced its lenders’ mortgage insurance cost to just $1 for first-home buyers who hold a loan-to-value ratio of 85 per cent.

Usually, for a $650,000 home, lenders’ mortgage insurance would be about $6000 a year for a loan-to-value ratio of more than 80 per cent.

Research conducted by St George shows that it takes the average Australian 10 years to save the 20 per cent deposit.

The bank also noted its studies concluded that 48 per cent of people looking for houses struggled with affordability in their desired area.

The Westpac Group’s firsthome buyer deal comes after the bank missed out as provider for the national firsthome buyers’ grant, which was awarded to the Commonwealth Bank and National Australia Bank.

St George general manager Ross Miller said the onset of the coronavirus pandemic had shifted more Australians into wanting to save for a home.

“Our research shows one of the biggest hurdles for firsthome buyers to overcome is the time it takes to save for a deposit despite being in the financial position to make homeloan repayments,” he said.