Westpac Group, one of Australia’s major banks, has announced that it will now recognise parental leave when assessing the borrowing potential of new parents who are home loan borrowers.
“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,” said Ainslie van Onselen, Westpac director of women’s markets.
Parents who want to avail of a home loan while on parental leave are required to provide proof of a return to work date and income, as well as demonstrate that they can service the loan even while on parental leave for up to 12 months.
According to Pass Go Home Loans managing director Jamie Moore, parents can still avail of home loans while on parental leave in other banks, but they are done on a case-to-case basis and usually just for three to six months of leave.
“The biggest thing is whether the borrower actually goes back to work,” Moore said. “They might stay on leave for longer and struggle to service or return part-time.”
Jessica Darnbrough, the spokeswoman of Mortgage Choice, said they welcome Westpac’s decision.
“This is a big win for soon-to-be parents,” she said. “Australians shouldn’t have their financial goals—such as buying a home—negatively impacted simply because they decide to start a family or have another child.”
In the past, Westpac was one of the first publicly-listed companies to introduce paid parental leave in 1995 and superannuation on unpaid parental leave in 2010.
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