From today, the bank has reduced Lenders Mortgage Insurance (LMI) to only $1 for eligible first home buyers with a Loan to Value Ratio (LVR) of up to 85%.
Saving for a deposit can be one of the biggest barriers to home ownership, with St. George research revealing the entire process of saving and planning can take almost ten years.
The LMI reduction paves the way for first home buyers to buy a home with a 15% deposit, rather than the traditional 20%, potentially shortening the process greatly.
St. George said a family home with a property value of $650,000 would have to pay more than $6,000 for LMI if they had a deposit under 20%.
The offer is available to owner-occupier first home loans on principal and interest repayments (P&I), with a maximum loan size of $850,000 for a maximum property value of $1,000,000.
St. George General Manager Ross Miller said many first home buyers were in a financial position to make home loan repayments but struggled to overcome the time it takes to save for a deposit.
“We are seeing many pain points experienced along that savings journey, including giving up holidays, reducing entertainment expenses, having to move back home with parents, moving in with friends or even leaning on family members to help top-up savings," Mr Miller said.
“By reducing the expense of Lenders Mortgage Insurance, first time purchasers may be able to afford a property that meets their needs sooner and save thousands of dollars.”
The 2020 St. George Home Buying Report found 64% of first home buyers expected to face financial problems leading up to their first property purchase.
Almost half (48%) were saving more in order to buy in their desired area, and nearly three in every ten were struggling to find a property that suits their needs.
The research also revealed one in every ten Australians looking to buy a home were doing so for the first time and a third of Aussies want to save for that goal quicker as a result of COVID-19.
“Australians have spent more time at home than ever before during the COVID-19 restrictions, and we are seeing a bigger trend in how the nation is re-evaluating their current living situation," Mr Miller said.
"For example, three-quarters of people would now prefer to live in a house over an apartment.
“First home buyers are calling for new ways to achieve their home ownership dreams sooner, and this option is designed to help make that goal within closer reach, particularly with the added benefit of a record low interest rate environment.”
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