Bendigo splashes out on mortgages in WA

BENDIGO and Adelaide Bank will buy $1.35 billion of mortgage debt from the West Australian Government as it looks to expand its business outside the eastern states.

The bank said it had agreed to buy about 6000 standard residential home loans from the State Government’s Keystart Housing Scheme Trust, designed to help people buy homes through low deposit loans and shared equity schemes.

Bendigo and Adelaide Bank managing director Mike Hirst said the bank would not be acquiring any loans that were more than one month in arrears.

“The customers in the port- folio we are acquiring have, on average, a track record of meeting their loan repayments for more than five years,” Mr Hirst said.

“Keystart has a long and successful history of providing loans to customers who satisfy rigorous serviceability criteria but do not have sufficient initial savings for a deposit.”

He said the deal would complement and grow the group’s existing business in WA, including increasing the proportion of the bank’s loan book held in the state from about 11 per cent to 13 per cent.

The purchase of the loans is expected to be completed by early December.

Keystart was established by the WA Government in 1989 to help people buy a home. It has a total loan book of about $4 billion.

Borrowers only require a 2 per cent deposit of the purchase price in WA’s metropolitan areas and up to 10 per cent in regional areas.