Great Southern Bank has introduced variable home loans with terms of up to 40 years, one of the few extended loan products available in the market.
The move is designed to help first-home buyers enter the property market by lowering monthly repayments.
The customer-owned bank said the product aligns with its purpose of helping more Australians into homeownership. It also builds on other initiatives such as support for government-backed lending schemes and savings accounts to help customers grow deposits faster.
The launch follows a strong year of growth for the lender, with home lending up 6.5% to $17.5 billion. Almost a third of new lending supported first-home buyers, including $1.24 billion in additional loans, while more than a quarter of Home Guarantee Scheme borrowers were key workers.
New research commissioned by Great Southern Bank shows strong appetite among younger buyers for longer loan terms. According to the survey, 29% of Gen Z and millennials, and 19% of Gen X, would consider taking out a home loan for up to 40 years if it meant lower repayments.
Rolf Stromsoe (pictured), Great Southern Bank chief customer officer, said the new product could provide a crucial stepping stone for Australians struggling to buy their first property.
“For some Australians having lower monthly repayments is the difference between renting and buying their first home,” Stromsoe said. “This could be their ‘starter home loan’ – exactly what they need to get their foot in the door at the beginnings of their home ownership journey.
“As their needs evolve and their earnings capacity changes, they may refinance any number of times – but this is the loan that can start it all.”
Great Southern Bank noted that relatively few customers were expected to keep the loan for its full 40-year term. The product allows flexibility through fee-free extra or early repayments, and an offset option for those wanting to reduce the balance faster.
Key eligibility criteria include:
Applicants aged 18-40, with at least one first-home buyer
Owner-occupier purpose only
New or existing home purchases, or construction (including refinance of land loans)
Principal and interest or construction interest-only repayments
Maximum 90% LVR (inclusive of fees)
The bank also cautioned that while longer loan terms can reduce monthly costs, they may lead to higher overall repayments across the life of the loan.
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