Parental leave
For more information
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Are you having a baby or planning to have children in the future?
Worried about how you're going to service your mortgage repayments?
We can help.
The parental leave option provides those expecting a birth with welcome relief by temporarily reducing their home loan repayments. Parental leave can assist in the management of your finances allowing you to enjoy this happy time in your life.
Benefits
- Allows customers on maternity/paternity leave who are eligible to temporarily reduce their home loan repayment amount by up to 50%
- Parental leave is available for up to 6 months per application.
Eligibility Criteria
- Loan must be fully drawn for a minimum of 18 months
- Loan must not be in arrears by more than 2 payments in the last 12 months
- Loan to value ratio must not exceed 90% at the time of the parental leave application
- Customer must pay at least 50% of the minimum repayment amount during the parental leave period
- Customer must provide a letter from their employer clearly stating the period for maternity/paternity leave and recommencement salary
- If applicable, the lender's mortgage insurer must approve the arrangement.
Conditions
- Parental leave is only available on the following loan products: Rocket Repay Home Loan, Rocket Repay Home Loan – Low Doc, First Option Home Loan, Premium Option Home Loan, and Premium Option Home Loan – Low Doc
- During parental leave, the loan balance will increase by the difference between the monthly interest charge and the reduced monthly loan repayment amount. At the end of parental leave the repayment amount will be adjusted so that the loan is repaid within its approved term. The customer will receive notification through a letter of variation
- The loan must still be repaid within its original term. However, at the end of your parental leave, you may apply to extend the term of your loan if required
- The maximum term for parental leave is 6 months per application
- For loans originally insured with Lender's Mortgage Insurance, additional cover may be required. The lender's mortgage insurer may also require a new valuation of the mortgaged property
- The standard interest rate for the loan will continue to apply and any changes to the interest rate during the parental leave will be automatically applied to the loan account
- Fees and charges may apply.
Possible Scenarios
Scenario 1
Denise and George have recently applied for parental leave. Denise has taken maternity leave and has provided supporting documentation from her employer. The couple have had a Rocket Repay Home Loan for over 18 months now. Their loan to value ratio is 86%. Denise and George have also demonstrated that they are able to pay at least 50% of the minimum repayment during the parental leave period. Will their application be approved?
Yes. Denise and George have satisfied the eligibility criteria and conditions for approval of parental leave.
Scenario 2
Jessica is currently pregnant and has applied for parental leave. Jessica has recently taken a pay-out and left her job as an alternative to taking maternity leave. Will Jessica's application for parental leave be approved?
Unfortunately not, Parental Leave will only be approved if the applicant has taken maternity/paternity leave and has a job to return to once their parental leave repayment option has concluded, to ensure they are able to repay the higher repayments. In addition, the customer must provide a letter from their employer detailing the period for maternity/paternity leave and recommencement salary.
Scenario 3
Judy and Terry are expecting twins. Their loan is 18 months old but has a loan to value ratio of 94%. Will their application for parental leave be approved?
Unfortunately not, in order to be approved for parental leave Judy and Terry would be required to have at least 10% equity in their property.
Scenario 4
Melissa has a fixed rate home loan and is currently pregnant. Can she apply for parental leave?
Unfortunately not, Parental leave is only available on variable rate loans which include the following products: Rocket Repay Home Loan, Rocket Repay Home Loan – Low Doc, First Option Home Loan, Premium Option Home Loan, and Premium Option Home Loan – Low Doc. The parental leave option is not available on any other loans including fixed rate home loans.
Scenario 5
Amanda and Jeffrey have applied for parental leave. They have recently had some financial trouble and have been in arrears on their home loan repayments three times in the past 12 months. Will their application be accepted?
Unfortunately not, to be approved the customer must not be in arrears for more than 2 payments in the last 12 months, showing that they have the ability to maintain their loan.
How to Apply
To apply for parental leave you need to write a letter addressed to us requesting the Parental Leave Reduced Payment facility. You will also need to provide a letter from your employer confirming the details of parental leave including time period and recommencement salary. Call us or visit one of our branches today.
