Westpac subsidiaries added to government guarantee scheme

St.George, Bank of Melbourne, and BankSA have officially joined as participating lenders authorised to offer the Australian government’s Home Guarantee Scheme (HGS).

The Westpac subsidiaries have joined the panel four months after their major bank parent.

It means that they are now able to support eligible home buyers with a deposit of at least 2 per cent to access Housing Australia’s Family Home Guarantee without paying Lenders’ Mortgage Insurance (LMI) and those with a 5 per cent deposits to access LMI-free home loans under the First Home Guarantee and Regional First Home Buyer Guarantee.

Westpac’s managing director of mortgages Richard Burton commented: “Through expanding access to the Home Guarantee Scheme, St.George, Bank of Melbourne, and BankSA will be able to help more Australians into the property market sooner with a smaller deposit.

“We’ve already helped more than 1,000 Australians purchase their home through the HGS since Westpac joined the panel in July this year and we’ve heard some amazing stories about the difference it’s making for these customers in terms of accelerating their home ownership journey.

“That’s why we’re keen to let prospective customers know about initiatives such as the Home Guarantee Scheme, as they can make a real difference to helping people into homes sooner.”

Westpac’s head of mortgages noted that recent Westpac data had found that the great Australian dream of home ownership was still alive and well, with the bank’s latest Home Ownership Report showing that cost-of-living and affordability challenges have not dampened home ownership ambitions.

The report found that one in five (20 per cent) Australians are planning to buy a first home in the next five years – a similar proportion as in late 2020.

This trend is largely being driven by Gen Z (those born in mid-1990s to 2010). Among this group, 44 per cent intend to achieve home ownership in the next five years, with Millennials (those born between 1981 and the mid-1990s) only slightly behind at 32 per cent.

One in 10 (11 per cent) of Gen Zs intend to buy in the next 12 months, more than double the national figure of 5 per cent, the report found.

“It’s encouraging to see that despite the higher cost-of-living and other affordability challenges, younger Australians are still the most driven in wanting to purchase a home and are taking steps to prioritise this goal,” Mr Burton concluded.

Westpac is the latest banking group to join the HGS, after Housing Australia (formerly known as the National Housing Finance and Investment Corporation [NHFIC]) opened up the panel to more lenders.

Previously, the NHFIC’s lender panel for the government’s First Home Guarantee (FHBG) and the Family Home Guarantee (FHG) schemes included only the Commonwealth Bank of Australia (CBA) and National Australia Bank (NAB) among the major banks. However, amendments to the investment mandate lifted the restriction on the number of major bank lenders, paving the way for Westpac’s inclusion. ANZ is the only major bank not currently on the lender panel.

The eligibility criteria for several of these schemes were also expanded earlier this year, enabling more people to qualify for the loans.

The expansion of the scheme is expected to provide significant support to first home buyers, single parents, and borrowers in regional communities by offering improved access to finance and competitive products.

According to Housing Australia, the number of guarantees in the 2022–23 financial year was more than 32,500, an increase of approximately 39 per cent from the previous year when only 23,300 guarantees were issued.

The data revealed the scheme’s share of the first home buyer market grew significantly, with almost one in three first home buyers in 2022–23 supported by the scheme, up from one in seven in 2021–22.

The Home Guarantee Scheme is part of a broader initiative by the federal government to support Australians in achieving home ownership. The federal Treasurer Jim Chalmers has pledged to continue the Coalition government’s First Home Guarantee, Family Home Guarantee, and Labor’s new Regional First Home Buyer Guarantee. These programs are expected to support 10,000 new home owners each year until 30 June 2026.

[Related: 1 in 3 first home buyers used guarantee schemes]