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ISCOVER
Staff Reporter
Yellow Brick Road has launched a new product for first home buyers, which enables first time borrowers to sidestep genuine savings requirements.
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The new First Step home loan, unveiled today, allows first time buyers to source a home loan deposit from a range of sources including family gifts, an inheritance or a tax return.
Mr Bouris, chairman of Yellow Brick Road, said the major banks’ savings requirements were squeezing first home buyers out of the market.
“The big banks often require a borrower to show that their deposit is the result of a savings plan, which can make it much harder for people to buy their first home,” he said.
Furthermore, savings histories were not a genuine indication of a borrower’s ability to service their loan, he added.
“More important factors are their income and their credit history, not the origin of their deposit,” he said.
“In reality, this policy by banks of insisting on a savings record benefits the banks’ profits by boosting their deposit base. It does nothing to help first time buyers.”
Yellow Brick Road will offer the First Step home loan via its partnership with Gateway Credit Union which currently administers its home loan range launched in December last year.
The product will offer a LVR of up to 95 per cent with a variable interest rate of 6.59 per cent.
