flagFounded: Founded in 1937, acquired by Westpac in 2008
businessOwned by: Westpac
monetization_onFunded by: Retail deposits and wholesale capital markets
securityLMI Provider: Westpac LMI (WLMI)and Arch Capital (WLMI –A)
account_balanceLender type: Subsidiary of a Major Bank
St George Bank is a competitive retail bank that offers great home loans for first home buyers, investors and people looking to refinance to a better interest rate.
Although it’s owned by Westpac, it has its own pricing and tends to work with more first home buyers and young families than Westpac does. It also has some unique credit policies which can allow more people to qualify for a major bank interest rate
How do St George Bank’s home loans compare?
They’re great at
- Great interest rates even if you have a small deposit
- Guarantor loans for first home buyers
- Property investors
- Lending to trusts
- Construction loans including owner builders
- Lending to Australian expats
- Working with mortgage brokers
- They accept properties that other lenders don’t
- Special discounts for doctors, engineers, accountants and lawyers
- Bridging loans
- Upfront bank valuations available
- They’ve got a large branch network in Sydney and NSW
- Sometimes they offer market-leading refinance rebates and cashbacks.
But they’ve got some drawbacks…
Coronavirus / COVID-19: St George home loan policy changes
St George has announced several changes to their home loan lending policies to reflect the economic outlook caused by COVID-19.
- St George has removed the LMI waiver for accountants, lawyers and engineers (previously available up to 90% LVR).
- They’ve also reduced the maximum LVR from 90% to 85% for the LMI waiver available to medical professionals.
- For all PAYG and casual employees, they now require the payslips to be no more than 14 days old (or 1 month for monthly pay cycles) at the time of application submission. There is an alternate income verification method for those in self-isolation, where a previous payslip combined with current salary credit evidence may be used.
- For self-employed borrowers, they now require the last quarter BAS, no older than 120 days from the last statutory BAS quarter (e.g. after 30 April, March quarter BAS must be used). And the corresponding BAS covering the same quarter for the prior year. You’ll also need to provide the last 3 months bank statements/transaction summaries (all trading accounts) no older than 14 days.
These policies are subject to change, so please get in touch with us for up to date information before applying for a home loan.
Coronavirus / COVID-19: St George mortgage relief
St.George customers who have lost their job or suffered a loss of income as a result of COVID-19 can defer their home loan repayments for three months, with the option for an extension for a further three months available after review.
At the end of this repayment holiday period, your required repayment amount will increase so you repay the total balance over the remaining loan term (including interest and charges added to the balance during the support period).
All requests for a repayment deferral are to be made through the online registration form available on their website.
Why are they popular with first home buyers?
Getting a low rate on a 95% home loan can be quite an ordeal. Most lenders offer their best discounts for home loans where the loan amount is less than 80% of the value of the property.
St George Bank will still give great pricing, no matter the size of your deposit.
They also have a Family Pledge Loan which allows you to buy a home with no deposit as long as your parents are willing to put up their property as additional security for the bank. This isn’t for everyone, but it’s a great way to get into the market if your parents are willing to help.
How are their interest rate discounts different?
While most lenders will offer a good interest rate if you are borrowing up to 80% of the property value, St George will give competitive discounts even if you have a smaller deposit.
For this reason they tend to have good interest rates for 95% home loans and guarantor loans, whereas the major banks often charge much higher rates if you don’t have a large deposit.
What home loans types does St George Bank have?
Their professional package is known as the Advantage Package and it’s a great choice if you are borrowing over $250,000. In return for paying an annual fee, you’ll get a discounted interest rate and a range of discounts on other products such as your offset account and credit card.
Their Basic loan has no annual fees, but normally has a higher rate, and so it’s more suited to people who have smaller loans. St George has a Line of Credit known as a Portfolio loan which is a great choice for investors that buy and sell property or shares regularly.
Keep an eye out for specials that St George offers from time to time on Fixed rate loans. When these are on offer they can be some of the lowest in the market.
Their low doc loan isn’t the most competitive and has strict qualifying criteria so isn’t in high demand.
Tip for applying with St George Bank
Use St George Bank’s Minimum Required Documents Checklist to prepare for your home loan application.
Note: This is the latest home loan checklist as of May 2019. Please refer to St George Bank for their most up-to-date document requirements.
SGB client story: Brian, NSW
- To buy first home.
- To borrow at 90% of the property value and avoid Lenders Mortgage Insurance (LMI).
After renting for a couple years, husband and wife solicitors Brian and Karen had moved up in their careers and were earning great incomes.
They decided it was time to stop paying dead money on rent and buy their very own home, a property worth around $1.4 million.
Having saved around $100,000 as a deposit, they needed around $100,000 more to borrow at 90% of the property value (LVR), complete the purchase and qualify for an LMI waiver, a special lender policy exception that applies to professionals like lawyers and medical professionals.
Under normal circumstances, LMI would be applied for LVRs over 80%. Since the couple was borrowing in excess of $1.2 million, they would be saving more than $25,000 on this cost alone.
Brian took out a $100,000 personal loan to come up with the deposit shortfall but unfortunately this component of their deposit wasn’t accepted as genuine savings because they didn’t save it themselves.
Without at least 10% deposit, they couldn’t qualify for an LMI waiver.
Although Brian’s personal loan didn’t count as genuine savings, he and his wife had been paying rent for the last couple of years at around $6,000 a month and they had the rental ledger to prove it.
Their mortgage broker told the couple that SGB will accept one year’s rental history in lieu of genuine savings and, in this case, it was able to support the character of Brian and his wife and their ability to afford the repayments on the $1,215,000 mortgage.
They hadn’t missed payment once so SGB accepted their 10% deposit and they were able to qualify for the home loan with no LMI.
Compare St George to other lenders
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Talk to one of our mortgage brokers by calling us on 1300 889 743 or complete our free assessment form.