When baby's on the way it's natural to start thinking about your financial position. If you have a home loan with Westpac or are thinking of applying, we have options which could help.
Taking out a home loan while on parental leave?
We recognise paid parental leave and back to work income when you apply for a new home loan. You may like to consider the parental leave home lending option during the application process. If you’d like to learn more, you can request a call-back from one of our Home Finance Managers.
Looking to reduce your repayments while on parental leave?
If you’re expecting, our parental leave mortgage repayment reduction could help you free up cash to cover some of the costs of your new arrival. If you’ve held your home loan with us for over 12 months, you could be eligible to reduce your home loan repayments up to 50% for up to 12 months while on maternity or paternity leave, subject to approval. If you’d like to apply, speak to one of our Home Finance Managers.
Are there any conditions I need to consider before I apply?
- Your loan balance will increase by the difference between the monthly interest charge and the reduced monthly loan repayment amount during the parental leave period. At the end of parental leave the repayment amount will be adjusted so that the new loan balance is repaid within its existing approved term. You will be notified in a letter of variation.
- Your loan must still be repaid within its original term. However, you may apply to extend the term of your loan at the end of your parental leave.
- Your borrowings must not exceed your maximum approved limit.
- The maximum term for parental leave is 12 months per application.
- For loans originally insured with Lender's Mortgage Insurance, additional cover may be required. Your 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.
Am I eligible?
If you are looking at applying for the parental leave mortgage repayment reduction, you will need to meet our eligibility criteria. Eligible customers with a home loan must:
- Have held an eligible home loan with us for over 12 months.
- Not be in arrears by more than 2 payments in the last 12 months.
- Have a loan to value ratio of no more than 90% at the time you apply.
- Pay at least 50% of the minimum repayment amount during the parental leave period.
- Have a job to return to after the parental leave period ends. You need a letter from your employer stating the leave period and your recommencement salary.
- Have approval from your lender's mortgage insurer, if applicable.
- Have one of our eligible home loan products on a variable interest rate.
Are any of these scenarios similar to your situation?
Denise and George apply for parental leave on a Rocket Repay home loan
Denise and George have recently applied for parental leave. Denise has taken maternity leave and has provided supporting documentation from her employer. The couple has had a Rocket Repay Home Loan for over 18 months. Their loan to value ratio is 80%. Denise and George have also demonstrated that they can 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. Their application is approved.
Jessica is pregnant and decides to take a pay out
Jessica is pregnant and has applied for parental leave. She 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 you have a job to return to at the end of the parental leave period. This is to ensure you can make the higher repayments. In addition, you must provide a letter from your employer detailing the maternity/paternity leave period and your recommencement salary.
Judy and Terry have very little equity in their property
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. To be approved for parental leave Judy and Terry would need at least 10% equity in their property.
Melissa has a fixed rate home loan
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: Rocket Repay Home Loan, Rocket Investment Loan, Flexi First Option Home Loan (owner occupier only) and our Premium Option Home Loan (new loans no longer available). The parental leave option is not available on any other loans including fixed rate home loans.
Amanda and Jeffrey are in arrears with their repayments
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 you cannot be in arrears for more than 2 payments in the last 12 months.
Things you should know
Credit criteria, fees and charges apply.
This information is general in nature and has been prepared without taking your objectives, needs and overall financial situation into account. For this reason, you should consider the appropriateness of the information to your own circumstances and, if necessary, seek appropriate professional advice.