Get your home sooner when a family member guarantees part of your home loan.
St.George Family Pledge in a nutshell
The guarantor can use their home's equity to guarantee part of their family members loan.
There's no cash to pay and you choose the amount.
Request to release guarantee when the Loan to Value ratio requirements are achieved.
- Help you reduce or avoid Lender's Mortgage Insurance, save you money when you need it most.
- Maximise the amount you can borrow - up to 100% of the purchase price, plus costs such as Stamp Duty and Legal Fees.
- There are no extra fees for the Family Pledge option. Standard guarantee and legal fees will apply.
- Can be new or existing St.George Home Loan customer or even retain their home loan with their existing home loan provider1
- Nominate a specific amount that you guarantee is limited to, rather than a guarantee for the entire loan amount1
- Be released from the guarantee (provided the borrower is not in default and we would not require Lender's Mortgage Insurance on the then outstanding loan balance under our credit criteria) much sooner than would normally occur.
Risk for Guarantors
A guarantor is liable for the amount specified in the Family Pledge guarantee. Your ability to borrow may be reduced if you agree to act as a guarantor. It is a promise to pay St.George the amount you nominate to guarantee. If the borrower does not pay the loan, if you do not have the cash to pay St.George if asked, your house may be sold to cover it. You will need to read and understand the full terms of the guarantee and seek independent legal advice before signing it.
Family members can act as a guarantor and use a portion of their own home's equity to help their loved ones, the borrower, to secure a home loan.
- reduces the borrower’s loan to value ratio
- can also help them save a significant amount of money by reducing or even avoiding the need to pay Lender's Mortgage Insurance.
With St.George Family Pledge, the guarantee can be limited to a specific amount (unlike some other banks), which helps provide certainty and allows the guarantee property to be released, upon request, when there is sufficient equity in the borrowers property.
For example, if Martin is planning to purchase a $300,000 property with a $15,000 deposit (LVR of 95%), which means Lenders Mortgage Insurance (LMI) would be payable.
If Martin’s parents were existing St.George Home Loan customers or had a freehold house and agreed to provide a family pledge guarantee of $56,500 as an additional security, the LVR would reduce to 80%.
This would result in the LMI premium requirement being waived, saving Martin up to $5,800.
Am I eligible?
- Family Pledge is available for all owner-occupiers and first home buyers purchasing an investment property.
- Family members who can provide the Family Pledge guarantee include parents, siblings, sons and daughters.
- Family Pledge is not available on refinances of existing Home Loans.
- No single guarantee is to represent more than 50% of the guarantor’s security.
Which home loans are eligible?
The Family Pledge option is available on range of our most popular home loans2.
You can select the best home loan product for your needs from our market leading range, or choose to split your loan to get the benefits of a combination of home loan features and interest rates2.
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Learn how much you could borrow, without knowing the loan type
Receive indicative approval in under 10 minutes
A home loan expert will call to talk you through your options
Don’t forget to let us know you’d like to apply for Family Pledge when our lender’s contact you in regards to your application.
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More useful information
- Family Pledge information
- Things You Should Know About Guarantees
- Use our document checklist for a comprehensive list of what you’ll need to apply
Credit criteria, fees, charges, T&C's apply. You will be required to seek independent legal advice before offering your home to guarantee a loan.
1. Credit criteria apply to the assessment of the adequacy of any proposed guarantee limit.
2. Portfolio Loan and owner-builder applications are excluded. Other exclusions may apply.
3. Advantage package Terms and Conditions apply and are available at stgeorge.com.au
The information on our website is prepared without knowing your personal financial circumstances. Before you act on this general information, please consider if it's right for you. If you need help, call 13 33 30.