Shifting the dial on parental leave lending
3 June 2016
- Westpac Group recognises paid parental leave and return to work income for home lending
- 88 per cent of Australians believe a bank should look beyond short-term situations, such as parental leave, when assessing borrowing potential
- 63 per cent of female home owners say as the size of their family grows, so do their needs and requirements from a home
Westpac is pleased to announce that from today, it will be standard operating procedure to recognise paid parental leave and return to work income for home lending across the Westpac Group.
According to Westpac research 88 per cent of Australians believe a bank should look beyond an individual's short-term situations, such as parental leave, when assessing borrowing potential. In addition, 82 per cent of Australians agree it is fair that a bank considers the future income of a person on parental leave when assessing loan suitability.
Ainslie van Onselen, Westpac's Director of Women's Markets said, "As part of our ongoing commitment to customers, we continually review our policies and processes to make sure we provide products and services that suit their needs. We've listened to our customers and today's announcement is a positive change that will benefit many current and future families across Australia."
Ainslie added, "Recognising paid parental leave and back to work income is about creating financial choice and an even playing field for working families - whether that be renovating, upgrading or buying a new property. Our research also shows 63 per cent of females who own a home believe their needs and requirements from their home grow as their family expands."
Highlighting Westpac's commitment to women and families, Ainslie said, "As the first bank to set up a dedicated business unit for women, we have a long and proud history of supporting women and families to achieve their financial goals.
"We were also one of the first publicly listed companies to introduce paid parental leave in 1995 and the first to introduce superannuation on unpaid parental leave to eligible employees in 2010. These industry-leading initiatives had flow on effects throughout corporate Australia and helped reverse the Australia-wide retirement savings gap experienced by female employees."
To be eligible for a loan while on parental leave, for up to 12 months, customers will need to provide proof of a return to work date and income and demonstrate they can service the loan while on parental leave. Today's announcement impacts home lending, and meets Westpac Group's responsible lending obligations.
For more information about applying for a Westpac home loan, please visit: http://info.westpac.com.au/homeloans/.
Westpac's Tips for Families
If you and/or your partner plan to leave work for any length of time after the birth of your baby, the change in income in addition to new expenses that come with having a baby could be significant. Here are some great tips to help you manage the expenses that may come with a growing family:
- Set a budget. Before you commence your search for a new home to fit your growing family, work out a realistic budget based on both a single and dual income to ensure you are looking to purchase a home in areas you can afford. Set up a budget spreadsheet to monitor your income minus your everyday expenses. This will be an indicator of how much you'll be able to commit to repayments.
- Find the right loan for your personal situation. What may be a great loan for one buyer may not be suited to another. It is important you speak to a home loan specialist or a home finance manager as they will be able to suggest a loan that is in line with your needs and lifestyle.
- Use an offset account. An offset account is one that's linked to your home loan but allows you to handle everyday transactions. Every dollar in your offset account reduces the amount of interest you are charged on your home loan. The more you put into the offset account and the longer it stays in there, the closer you become to owning your home sooner. Offset accounts are often available with variable loans like the Westpac Rocket Repay Home Loan.
- Factor in additional costs. In addition to financing the upgrade of a new home, it is important to factor in other expenses such furniture and other essentials. Make a list and research what the expected cost many of these items are, even if you don't intend to purchase now.
- Trends and fads. Don't be too swayed by the latest trends - they come and go. Design your home around style and comfort that suits you and your family. Having a neutral colour scheme and adding accents such as coloured cushions and curtains can keep your interior designs on trend and at a reduced cost.
Westpac Home Lending research
The research was commissioned by Westpac and conducted by Lonergan Research. Lonergan Research surveyed 2,289 Australians aged 18 and over who have ever worked. Surveys were distributed throughout Australia including both capital city and non-capital city areas. The survey was conducted between 20 and 25 May 2016. After interviewing, data was weighted to the latest population estimates sourced from the Australian Bureau of Statistics.
Westpac Home Owns Report
The report was commissioned by Westpac and powered by Lonergan Research. Lonergan Research surveyed 1,115 Australian home-owners aged 18 and over. Surveys were distributed throughout Australia including both capital city and non-capital city areas. The survey was conducted between 25 August and 1 September 2015. Following the completion of interviewing, the data was weighted to the latest population estimates sourced from the Australian Bureau of Statistics.
1 Maternity or paternity leave
2 Westpac Group includes Westpac, St.George, BankSA, Bank of Melbourne and RAMS
3 Westpac Home Lending research
4 Westpac Home Lending research