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New parents will have their paid parental leave and return to work income recognised when they apply for a home loan, Westpac has announced.
The major bank introduced the new measure after its research found that 88 per cent of Australians believe a bank should look beyond an individual’s short-term situations, such as parental leave, when assessing borrowing potential.
The research also revealed that 82 per cent of Australians agree it is fair that a bank considers the future income of a person on parental leave when assessing loan suitability.
“As part of our ongoing commitment to customers, we continually review our policies and processes to make sure we provide products and services that suit their needs. We’ve listened to our customers and today’s announcement is a positive change that will benefit many current and future families across Australia,” Westpac’s director of women’s markets Ainslie van Onselen said.
“Recognising paid parental leave and back to work income is about creating financial choice and an even playing field for working families, whether that be renovating, upgrading or buying a new property,” Ms van Onselen said.
“Our research also shows 63 per cent of females who own a home believe their needs and requirements from their home grow as their family expands.”
Westpac was one of the first publicly listed companies to introduce paid parental leave in 1995 and the first to introduce superannuation on unpaid parental leave to eligible employees in 2010.
“These industry-leading initiatives had flow-on effects throughout corporate Australia and helped reverse the Australia-wide retirement savings gap experienced by female employees,” Ms van Onselen said.
To be eligible for a loan while on parental leave, for up to 12 months, customers will need to provide proof of a return to work date and income, and demonstrate they can service the loan while on parental leave.
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James Mitchell
AUTHOR
James Mitchell has over eight years’ experience as a financial reporter and is the editor of Wealth and Wellness at Momentum Media.
He has a sound pedigree to cover the business of mortgages and the converging financial services sector having reported for leading finance titles InvestorDaily, InvestorWeekly, Accountants Daily, ifa, Mortgage Business, Residential Property Manager, Real Estate Business, SMSF Adviser, Smart Property Investment, and The Adviser.
He has also been published in The Daily Telegraph and contributed online to FST Media and Mergermarket, part of the Financial Times Group.
James holds a BA (Hons) in English Literature and an MA in Journalism.