Westpac rolls out new offer for mortgage guarantors

Effective from Friday, 23 October, eligible guarantors supporting a home loan customer using a two-year term deposit will receive a 2.29 per cent interest rate on guaranteed funds.

The term deposit offer is subject to the following eligibility criteria:

• The mortgage application must have a total value exceeding $150,000
• The guarantor must provide a minimum deposit of $5,000
• The guarantor deposit cannot exceed 20 per cent of the loan value
• Interest must be paid monthly or annually.

Westpac noted that following the initial two-year term, the term deposit will revert to the customer rate and must be reinvested at the preferred term, interest rate and interest frequency until the required loan-to-value ratio is achieved and the guarantee can be released.

This latest offer follows Westpac’s move to expand the list of acceptable family members who can provide a guarantee.

Westpac also expanded the range of acceptable loan purposes for guarantor applications to include refinances and home improvements, provided they are funded via progressive drawdowns.  

Last month, the bank also revealed that it would no longer require independent legal advice to be sought for guarantee income.

[Related: Major bank overhauls guarantor policy]