From 1 July, Westpac will offer mortgages to Australians purchasing or building a home through the Australian Government’s Home Guarantee Scheme.
The scheme sees the government effectively backing a portion of a buyer's home loan, allowing them to avoid paying Lenders’ Mortgage Insurance (LMI).
Westpac is the third major bank to jump on board the scheme, with Commonwealth Bank and NAB already offering it to borrowers.
“We are delighted to be part of the Australian Government’s Home Guarantee Scheme," Westpac consumer and business bank CEO Chris de Bruin said.
“Saving a 20% deposit is one of the many challenges people face when trying to get a foot on the property ladder, particularly for first home buyers or single parents."
The scheme offers three guarantees to would-be home buyers:
- First Home Guarantee
The First Home Guarantee allows eligible first home buyers to snap up a property with as little as a 5% deposit.
- Regional First Home Buyer Guarantee
Offers some first home buyers in regional Australia the option to purchase a home with a deposit of as little as 5%.
- Family Home Guarantee
Supports eligible single parents and guardians to buy a home with as little as 2% deposit.
“We are also pleased to be able to support friends and family members getting together to buy their home under the new changes to the scheme,” Mr de Bruin said.
That change, as well as others allowing permanent residents and Aussies who haven’t owned a home in the last 10 years access to the scheme, will come into play on 1 July.
For now, only Westpac and RAMS customers will be able to access the guarantees through the bank. They will become available across Westpac Group’s other banking brands later this year, such as Bank of Melbourne, St George, and BankSA.
The bank is currently offering those applying for Westpac home loans supported by the Regional First Home Buyer Guarantee or Family Home Guarantee up to $2,000 cash back on Westpac home and contents insurance policies, underwritten Allianz.
Home Guarantee Scheme helps 100,000 Aussies buy homes
According to the National Housing Finance and Investment Corporation (NHFIC), more than 100,000 Australians have now used the scheme to buy or build their own home.
Since its inception in 2020, it has supported 34,000 regional Australians and 20,000 key workers into property ownership.
"As a government organisation, we support Australians across the housing spectrum from those renting in community housing, through to Australians with the goal of homeownership,” NHFIC CEO Nathan Dal Bon said.
“We look forward to helping more Australians over the coming years into homes sooner under the scheme.”
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Image by Tierra Mallorca on Unsplash.
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