The move from St.George will give those with a deposit of 15% a chance to keep that money in their pocket
St.George Bank today announced it will be helping Australians kick off their property journey sooner. Effective today, the bank will lower Lenders Mortgage Insurance to just $1.00 for eligible first home buyers with a Loan to Value Ratio of up to 85%.
Typically, home buyers who have saved up a deposit of less than 20% of a property’s value will have to purchase LMI, which can cost thousands of dollars. The move from St.George will give those with a deposit of 15% a chance to keep that money in their pocket.
To be eligible, you’ll need to be a first home buyer taking out an owner occupier, principal and interest loan of up to $850,000 (meaning the maximum value of the home will have to be $1,000,000).
St.George General Manager Ross Miller said first home buyers face a number of challenges ahead of their property purchase, though many are in a stable enough position to make home loan repayments.
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, he 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, he said.
While present economic conditions haven’t been favourable to many, they have opened up opportunities for those with sights on the property market, who have been heartened by record low home loan rates and steadily dropping property prices.
In fact, research from St.George found that one in 10 Australians looking to buy a home are doing so for the first time, and the COVID-19 pandemic has made saving for that goal a priority for one third of Australians.
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. For example, three quarters of people would now prefer to live in a house over an apartment, Miller said.
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, he said.