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St George will now accept rental payments as evidence of genuine savings.
In a move that will help first home buyers all over the nation, St George has announced it will accept rent as a form of savings for a home deposit if there is evidence of a minimum of 12 months continuous satisfactory rental history and the property is leased through a property manager.
“This is a significant breakthrough for first homebuyers and a move which could be a major boost to the home finance industry,” Loan Market chief operating officer Dean Rushton said.
“Higher interest rates, tougher lending conditions and the end of the boosted federal government grant at the end of last year have driven first time buyers out of the market.
“Another major restriction for them has been the difficulty in saving a deposit for a home loan, particularly in this economic climate with people having to cope with massive cost of living increases including rental payments.”
Up till now, all Australian lenders have required a percentage of the purchase price - normally five per cent minimum - to be saved for all loans.
“But if rental payments were taken into consideration as a factor in assessing genuine savings that would enable many people to pursue the dream of home ownership,” Mr Rushton said.
“St George has now moved to accept rental history as a form of genuine savings and they should be applauded for this decision as it will enable a lot more people to realise the great Australian dream of home ownership.”
Rent refers to the payment made by a tenant periodically to a landlord for the use and occupancy of a property.