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Media Release

New research reveals half of Aussies don’t know exactly what it means to be a home loan guarantor

26 June 2017

New research from the 2017 St.George Home Buying Survey has revealed half (50%) of all Aussies, and 68 per cent of first home buyers[1], are not familiar with concept of a home loan guarantor. In addition, almost one in three (29%) Aussies either don’t know what it means at all or have never even heard of it.

St.George General Manager for Retail Banking, Ross Miller, said this could mean Aussies are missing out on opportunities that could help family members purchase their first home sooner.

“We know there is a real interest in exploring alternative paths to home ownership and many Australian parents want to help their kids achieve their dream of buying a home. However, the research signals there’s a gap in Aussies’ understanding of what paths to purchase could be available.

“As a family bank, St.George is passionate about helping all generations from the youngest to the oldest, which is why we’re proud to be helping hundreds of Aussies understand the different paths towards achieving home ownership. While it might not be the right fit for everyone, St.George Family Pledge is one example, which allows a family member to guarantee part of a home loan using the equity in their own home.”

Half (51%) of first home buyers who would not consider a parental guarantor felt they should be able to own a property without help, revealing many may feel a strong sense of independence when it comes to buying their own home.

The research found more first home buyers are willing to accept a guarantor offer from their parents (48%), rather than taking the first step to initiate the conversation themselves (33%). Yet three quarters (74%) of Australian parents agree that being able to help their children on their home ownership journey is important to them.

Even though many parents want to support their kids in achieving their home ownership goals, the research found they are more likely to help through non-financial means, such as letting their adult children live with them (42%) and assisting with babysitting (41%), rather than assisting to pay for a home loan (20%) or their everyday expenses (19%).

The survey also explored the perceived barriers that home owners and first home buyers faced when purchasing their first home. Not surprisingly, current first home buyers are more likely to feel affected by challenges around affordability, with almost half (47%) indicating they’ve struggled with a lack of affordability in their desired area – more than triple of those who bought their first home over 20 years ago (affecting 15%).

Competition with other buyers and not understanding which home loan deal is most suitable based on their financial situation were other common challenges that appear to have grown significantly, affecting 31 per cent and 36 per cent of current first home buyers respectively, compared to only 8 per cent and 15 per cent of those who bought their first home over 20 years ago.

The survey also found that on average, prospective first home buyers intend to buy their first home in the next 2.2 years, but expect it will take a total of 6.4 years to save up for it.

“This really shows the importance of understanding all the different ways to purchase a home, and setting realistic goals and timelines. We’ve found many customers who want to get into the market sooner are researching options like Family Pledge to see if it’s right for them, or look at purchasing their first home in more affordable areas.

“Often the best way into the market is to intimately understand all the options that could be available to you, so I’d encourage any prospective buyers to conduct thorough research and speak with your local St.George banker who can help you make a decision that’s appropriate for your financial situation,” Ross concluded.

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Media enquiries:

Dianne Edwards
M: 0421 623 014

[1] After being told what a home loan guarantor means, recipients were asked to identify whether they knew exactly what  it was, had some idea but didn’t know the exact meaning, had heard of it but didn’t know what it meant, or had never heard of it before