Do your parents want to help you buy a home or invest in property? St.George Family Pledge is a way for your parents or family to help you purchase a home without them actually providing the cash for a deposit.
How Family Pledge works
Your family members can use their own home's equity to provide additional security for a portion of your loan amount. This solution reduces your loan to value ratio and can also save you a significant amount of money by reducing or even avoiding the need to pay Lender's Mortgage Insurance. So you get into your home faster, with help from your family.
With the St.George Family Pledge, the guarantee can be limited to a specific amount (unlike some other banks), which helps provide certainty and allows the property to be released earlier than guarantees which cover 100% of the loan amount.
- By increasing your security through a guarantee from your family, you may be able to reduce or avoid paying Lender's Mortgage Insurance. Lender's Mortgage Insurance is generally payable on loans that exceed 80% of the value of the property
- Family Pledge can help you maximise the amount you can borrow so you can purchase the property you want. A guarantor can request to limit the guarantee to a specific amount1
- Both the borrower or guarantor can ask us to release the guarantee (subject to approval) when the standard Loan to Value ratio (LVR) requirements are achieved
- There are no extra fees for the Family Pledge Option. Standard guarantee and legal fees will apply
- The guarantor can be a new or existing St.George Bank Home Loan customer or even retain their home loan with their existing Home Loan provider1.
John 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 John’s parents were existing St.George Bank 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 John up to $5,800.
Am I eligible?
- You can use a St.George Family Pledge to buy a home or invest in residential property, and you don’t have to be a first home buyer to be eligible
- Family members who can provide the Family Pledge guarantee include parents, siblings, sons and daughters
- Family Pledge is not available for existing loans or refinances. Increases to loans with Family Pledge are allowed but the Family Pledge amount may not be increased
- Individual applicants are restricted to a maximum of one parental guarantee/family pledge borrowing
- 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 a wide range of St.George home and residential investment loan products, so you can choose the home loan option that suits you best.
- Advantage Package2
- Standard Variable Rate Home Loan
- Fixed Rate Home Loan
- Basic Home Loan
- Building Loan3
Family Pledge is not available on existing loans or refinances.
How to apply
Let us know you’d like to apply for Family Pledge when you begin your home loan application.
Basic documentation requirements for the borrower(s) include:
- Proof of income (for example, salary statements, rent received, etc.)
- Evidence of savings
- Self-employed and company applicants need to provide copies of recent tax returns and financial statements
- Copies of the Contract of Sale or Building Contracts for new homes are required.
Use our document checklist for a comprehensive list of what you’ll need to apply.
Basic documentation requirements for the guarantor(s) include:
- Documentation containing the property address, council value and property owner details of the property offered as security (e.g. recent copy of council rates and water rates)
- Copies of loan statements (if the loan is with another financial institution).
For more information
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.
1. Credit criteria apply to the assessment of the adequacy of any proposed guarantee limit.
2. Portfolio Loan is excluded. Other exclusions may apply.
3. Owner-builder applications are excluded.