Westpac dangles carrot for first-home savers
Westpac is promising $1000 cash to first-home buyers who meet their savings goals, as well as bumping them to the front of the lending queue.
New Reserve Bank rules introduced in October have made it harder for buyers with small deposits to get into the housing market.
Treasury estimates 6000 to 8000 first home buyers could be affected by the new regime.
Today Westpac introduces HomeSaver, a package that gives first-home buyers preferential treatment, a $1000 cash booster, and coaching through the savings process.
The bank's general manager of retail, Ian Blair, said it was "tough times" for home buyers, and the bank wanted to provide practical support.
To be eligible for the cash, he said borrowers have to save for at least six months and pull together a minimum of $10,000.
Along the way, they will be given monthly savings advice and encouragement from the bank's "e-coach" of their choosing:
"You can have the gentle motivator, or the disciplinarian," Blair said.
HomeSavers were unlikely to soak up the bank's entire allotment of high loan-to-value ratio [LVR] loans. "We've got a decent pool of money," he said.
"There's been a perception that banks aren't doing high LVR lending - we are."
Westpac is well-positioned compared with some of its rivals, as it pulled back from high LVR lending well in advance of the new rules' introduction. Kiwibank is the only other major lender to commit to putting first-home buyers at the front of the queue.
In July, Westpac also introduced Family Springboard, which lets home buyers use an immediate family member's savings or equity to top up their deposit.
Blair said the amount of loans using the facility had not dramatically increased.
This story has been updated to correct some figures.