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The non-major bank will cease accepting new applications for its Deposit KickStart loan — a Family Guarantee product — from next month.
Suncorp Bank has confirmed that it will no longer accept new Family Guarantee loan applications, withdrawing its Deposit KickStart loans from 26 July 2023.
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The bank’s Deposit KickStart lets owner-occupiers use the equity in the home of a family member towards the purchase of a new owner-occupied home.
Currently, approved borrowers can make use of the product to borrow up to 110 per cent of the purchase price of their new property and avoid paying lenders mortgage insurance (without needing the required 20 per cent deposit).
It is available for approved borrowers using a family member as a guarantor so that they can own and occupy their own property.
However, Suncorp Bank will no longer accept new applications for its Deposit KickStart Loans from 26 July as the bank moves to “simplify” its product offering and focus on “improving the experience for brokers and customers within [its] core product set”.
Speaking of the change, Troy Fedder, head of broker partnerships at Suncorp Bank, said: “Applications that are submitted and pre-approved by 26 July 2023 can be converted within the 90-day validity period.
“Our team is working proactively with our broker partners and existing Deposit KickStart customers to advise how this change may impact them.
“We regularly review our offerings to our broker partners and customers to ensure we are providing products and services that best meet their needs.
“We will continue to offer leading service in the home lending space with consistently fast turnaround times and innovative products and services.”
Suncorp Bank has flagged that there are no changes to the types of guarantees accepted in business banking, including small business.
BCCC re-evaluates bank treatment of guarantors
The BCCC monitors banks’ compliance with the Banking Code of Practice, a rule book maintained by the Australian Banking Association (ABA) that sets out clear rights for customers and is enforceable by law.
It includes obligations that banks need to undertake to ensure customers make “fully informed decisions” before agreeing to be a guarantor.
However, a BCCC report released in 2021 found that banks were failing to uphold guarantor obligations.
After completing performance audits with 13 banks, the watchdog found non-compliance with a number of the industry code’s provisions including pre-guarantee disclosure requirements and also found multiple instances where banks could not demonstrate their compliance.
In February, the BCCC launched a review of the guarantor practices, undertaking a stakeholder consultation and borrower survey.
A final report is expected later this year.
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