St. George Seniors Access Home Loan

Founded in 1848 in rural SA and now the fifth largest bank in Australia, St. George is generally considered more of a retail and home lending bank than the larger commercial banks, and it prides itself on its customer service and its innovative employee benefits. The bank is rapidly growing and spreading from its base in New South Wales and South Australia into the other states.

St. George entered the reverse mortgage market with its Seniors Access Home Loan program. This package was awarded a two-star rating by Cannex in the inaugural October 2007 Reverse Mortgage Star Ratings report, in part due to a limited range of products as opposed to some of the larger lenders.

In 2005, the Seniors Access loan was the Silver Winner in the Reverse Mortgage of the Year category sponsored by Personal Investor Magazine. Also in 2005, St. George’s program was a finalist with the Money Magazine awards in the Best Reverse Mortgage category.

St. George is a founding member of Senior Australian Equity Release Association of Lenders (SEQUAL) and as such adheres to a strict and voluntary code of conduct.

The Seniors Access program carries a variable interest rate. There are two options for borrowers. The first, with a lower monthly maintenance fee, permits a lump sum withdrawal; the other, with a more expensive ongoing fee, permits funds to be accessed as a lump sum, a regular withdrawal, or a combination of both.

The maximum loan-to-value ratio is 25% and varies with the age of the youngest borrower. Unlike other reverse mortgage lenders, the minimum age to qualify is 63 years rather than 60.

According to the Cannex report, equity protection is not offered, meaning the loan and the interest it accrues can consume all of the equity and leave nothing for an inheritance or an accommodation bond, although the no negative equity guarantee mandated by SEQUAL ensures the borrower will not owe more than the value of the home.

The upfront loan origination fee covers the cost of the original property valuation. According to the Cannex report, additional valuations are required every five years, and the cost is rolled into the loan.

There is a portable loan option. Voluntary repayments can be made at any time within the life of the loan.