Family Pledge
Get your home sooner when a family member guarantees part of your home loan.
St.George Family Pledge in a nutshell
Benefits
Borrowers
Help you reduce or avoid Lender's Mortgage Insurance, save you money when you need it most
Maximise the amount you can borrow - up to 100% of the purchase price, plus costs such as Stamp Duty and Legal Fees
There are no extra fees for the Family Pledge option. Standard guarantee and legal fees will apply.
Guarantors
Can be new or existing St.George Home Loan customer or even retain their home loan with their existing home loan provider1
Nominate a specific amount that you guarantee is limited to, rather than a guarantee for the entire loan amount1
Be released from the guarantee (provided the borrower is not in default and we would not require Lender's Mortgage Insurance on the then outstanding loan balance under our credit criteria) much sooner than would normally occur
Family Pledge is available on refinances of existing Home Loans.
Risk for Guarantors
A guarantor is liable for the amount specified in the Family Pledge guarantee. Your ability to borrow may be reduced if you agree to act as a guarantor. It is a promise to pay St.George the amount you nominate to guarantee. If the borrower does not pay the loan, and if you do not have the cash to pay St.George if asked, your house may be sold to cover it. You should seek financial advice before making a decision. You will need to read and understand the full terms of the guarantee and seek independent legal advice before signing it.
Example
Family members can act as a guarantor and use a portion of their own home's equity to help their loved ones, the borrower, to secure a home loan. This solution:
- reduces the borrower’s loan to value ratio
- can also help them save a significant amount of money by reducing or even avoiding the need to pay Lender's Mortgage Insurance.
With St.George Family Pledge, the guarantee can be limited to a specific amount (unlike some other banks), which helps provide certainty and allows the guarantee property to be released, upon request, when there is sufficient equity in the borrowers property.
For example, if Martin is planning to purchase a $300,000 property with a $15,000 deposit (LVR⁺ of 95%), which means Lenders Mortgage Insurance (LMI) would be payable.
If Martin’s parents were existing St.George Home Loan customers or had a freehold house and agreed to provide a family pledge guarantee of $56,500 as an additional security, the LVR⁺ would reduce to 80%.
This would result in the LMI premium requirement being waived, saving Martin up to $5,800.
Am I eligible?
Family Pledge is available for all owner-occupiers and first home buyers purchasing an investment property
Family members who can provide the Family Pledge guarantee include parents, siblings, sons and daughters
No single guarantee is to represent more than 50% of the guarantor’s security.
Which home loans are eligible?
Family Pledge is available on the following home loans and options, including our split loan, packaged² and building³ options.
- Basic variable rate loan
- Variable rate loan (offset, split, package and building³ option available)
- Fixed rate loan (split and package option available)
Start your application online
A home loan expert will call you once you have submitted your application to talk through next steps.
More useful information
- Family Pledge information
- Use our document checklist for a comprehensive list of what you’ll need to apply
Keep exploring
Home loan features
Important information
Conditions, credit criteria, fees and charges apply. Based on St.George’s credit criteria, residential lending is not available for Non-Australian resident borrowers. Interest rates subject to change. Before making a decision, it’s best to read the terms and conditions.
Loan Accounts – Charges for specific services and accounts (PDF 43KB)
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.
1Credit criteria apply to the assessment of the adequacy of any proposed guarantee limit.
2Advantage Package: Terms & Conditions (PDF 648KB) apply. A $395 annual package fee applies and is payable from an eligible St.George transaction account. Before deciding to acquire a St.George transaction account, read the terms & conditions, and consider if the product is right for you.
3Owner-builder applications are excluded. Other exclusions may apply.
+LVR stands for the initial loan to value ratio. LVR is the amount of your loan compared to the Bank’s valuation of your property offered to secure your loan expressed as a percentage. Home loan rates for new loans are set based on the initial LVR and won’t change during the life of the loan as the LVR changes.