Are you having a baby or planning to have children in the future? When baby's on the way it's natural to start thinking about your financial position. Bank Manager Megan Burgess reveals a way you can take more maternity leave and free up cash for your new arrival.
Would you like to reduce your repayments over this period? We can help.
Benefits for parents
The parental leave option allows you to reduce your home loan repayments by up to 50% for up to 6 months while you are on maternity/paternity leave1.
Check your eligibility
- Your loan must not be in arrears by more than 2 payments in the last 12 months
- Your loan to value ratio must not exceed 90% at the time you apply
- You must pay at least 50% of the minimum repayment amount during the parental leave period
- You must 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
- If applicable, your lender's mortgage insurer must approve the arrangement.
Parental leave is available on:
- Rocket Repay Home Loan
- Rocket Investment Loan
- Flexi First Option Home Loan
- Flexi First Option Investment Property Loan
Review all these conditions before you 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 loan is repaid within its 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.
- 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. 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.
How to apply
- Write a letter addressed to Westpac requesting the Parental Leave Reduced Payment facility
- Provide a letter from your employer confirming the details of parental leave, including time period and recommencement salary.
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 86%. 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. 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
- Subject to approval.