Relocation With
End Loan
Product Specification
For further information
www.partners.stgeorge.com.au
Mortgage Central 1300 137 532
This product specification is the property of St.George Bank. It is for the use of St.George Bank employees, contractors and accredited brokers only. It is not to be distributed to customers.
Product description
The Relocation Loan is AVAILABLE for:
The Relocation Loan is designed to assist customers with
the purchase of a new property for the purpose of owner
occupation or Investment when the sale of their existing
property is still to occur.
• Owner Occupiers
The Relocation Loan has 2 options.
Option 1 - With End Loan - caters for customers who will
have a residual loan secured by a mortgage on their new
property once the sale of their existing property occurs.
Option 2 - With No End Loan - caters for borrowers who
want to relocate their property but have not yet sold their
existing property. This loan allows for the capitalisation of
interest until the sale of the existing property occurs. This
option caters for customers who will not have a residual
loan once the sale of their existing property occurs. Refer
to Relocation With No End Loan Product Specification
The End Loan is based on the purchase price of the new
property plus purchase/selling costs, less equity in the
existing property and allowing for a 15% fall in the sale/
valuation of the existing property. This allows for a
possible fall in property value/sale price of the existing
property.
Key benefits / target market
Targeted towards subsequent home buyers who wish to
purchase a new property for the purpose of owner
occupation or Investment before they have sold their
existing property.
Key Benefits
•The interest rate may be lower than standard ‘bridging
finance’ rates available elsewhere.
•Borrowers may be given greater bargaining powers
when purchasing their new home.
•For Contract Building loans, borrowers are able to live
in their existing home while the new home is being
constructed.
•Repayments and serviceability are calculated on the
end debt amount.
•Investors
• Contract Building Loans
• New Loans
• 1st Mortgage ONLY
•Land to Build (Building is to be completed within
6 months)
• Flexible Choice
A Relocation Loan is NOT AVAILABLE for:
• 2nd Mortgages
• Increase (Further) Loans
• Vacant Land
• Extended settlement loans
• Owner Builder Loans
• Family Pledge loans
Multiple Drawdowns
An advance may be used for the payment of a deposit,
(sales) contract and mortgage stamp duty or other
associated purchase costs provided the following criteria
is met:
• Only one advance is to be made for these amounts
•Security is to be in place against the existing security
property
Building Loans
Building loans are allowed provided they are being
undertaken via a Contract builder (owner builders
excluded). There is a maximum of 6 months to build the
home from the date of the first advance, then a maximum
of 6 months from final draw down to sell the existing
home, a total relocation period of 12 months. Eg if the
building is completed within 4 months, then the maximum
relocation term will be 10 months.
Availability
Switching
The Relocation With End Loan is available on any existing
product type currently available (subject to individual
product specifications) for the end debt portion.
The capitalised portion is to be on the standard variable
rate only.
Not available during Relocation period.
Splitting
Available with Flexible Choice only.
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Increase (Further) Loan
Relocation Period – Non-Building Loans
Not available during Relocation period.
The sale and settlement of the borrower’s existing
property is to be completed on or before 6 months after
the date of the first advance of the loan.
Capital Gains Tax Implications for Investors
Any estimated CGT liability arising from the sale of
property is to be included in the selling costs for
investment Relocation Loan Calculations.
For any investment property purchased after 19th
September, 1985, there may be Capital Gains Tax (CGT)
implications associated with the sale of the investment
property.
All borrowers are to provide a statement from their
accountant as to the estimated amount of CGT they will be
liable for in relation to the sale of the investment property
involved in the Relocation Loan, based on the property
valuation obtained by the Bank.
Loan amount
Minimum: - $10,000
Maximum: - $1,000,000*
Note:
* Any requests for loans in excess of $1,000,000 are
to be referred to Mortgage Central before proceeding.
Interest rate
During the relocation period (ie until the existing property
is sold) the standard variable interest rate is applicable on
the capitalised portion. Refer to the current ‘Lending
Interest Rates at a glance’ for that rate.
Loan term
END LOAN SEQUENCE
Principal & Interest: Refer to individual product
specifications.
Interest Based Term: Refer to individual product
specifications.
At the end of the Interest Based term the repayments
automatically change to Principal and Interest for the
remainder of the contract term, which must be for a
minimum of 12 months.
Building Loans: Refer to individual product specifications.
CAPITALISED LOAN SEQUENCE
6 months for Non-Building Loans
12 months for Building Loans
Relocation Period - Building Loans
If the loan is a contract builder-building loan, the borrower
is to ensure that the building is completed within 6 months
of the date of first advance. The sale and settlement of the
borrower’s existing property is to be completed on or
before 6 months after the date of the final progress
payment. The maximum Relocation Period is therefore 12
months in total.
Note:
Owner builder loans are excluded.
Repayment types
END LOAN SEQUENCE
Principal & Interest
Interest Based
Progressive drawdown period repayments (building loans
only - during construction)
Principal & Interest
Repayments are calculated at the interest rate charged to
the loan using the ‘end loan’ amount. This figure is
rounded to the next whole dollar and the monthly
administration fee is then added.
The minimum repayment frequency required is monthly.
Customers may nominate to pay weekly or fortnightly.
Fortnightly repayments are one half of the minimum
monthly repayment. Weekly repayments are one quarter
of the minimum monthly repayment. Weekly and
fortnightly frequency repayments are to be in whole
dollars. If necessary these repayments are rounded up to
the nearest dollar.
Interest Based
Repayments are calculated at the interest rate charged to
the loan using the ‘end loan’ amount.
Monthly repayment frequencies ONLY are allowed, ie the
customer cannot nominate to pay weekly or fortnightly.
Progressive drawdown period repayments
During the construction period (until loan is fully drawn)
repayments are interest only repayments. Refer to current
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Residential Loan Agreement General Terms and
Conditions.
CAPITALISED LOAN SEQUENCE
No repayments required.
The interest charges are capitalised over the term of the
loan and the full repayment of principal plus capitalised
interest and all fees and charges is required on the sale of
the existing property.
Repayment due date
The first repayment is due one month after the settlement
date (date of first advance), unless that date is the 29th,
30th or 31st of the month, then the first repayment is due
on the 28th of the next month.
All subsequent repayments are due on the same day as
the first repayment in each following month.
Automatic Transfer
Automatic transfer from a St.George transaction account
is the repayment method preferred by the Bank.
Nominated transaction accounts will be free of some
transaction fees and reduced account keeping fees if a
loan repayment is made by this method at least once per
month.
Note:
May not apply to all transaction accounts. Refer to
‘Bank Accounts Fees and charges and how to
minimise them’ for excepted transactions.
Direct Credit (Inward Direct Entry)
A payment via Direct Credit to the loan initiated from
another financial institution can be accepted.
Direct Debit (Outward Direct Entry)
For customers nominating weekly or fortnightly
repayments, these payments will commence as follows.
Payments can be made via an automatic transfer (set up
by St George) from a transaction account at another
financial institution
Weekly - on the first nominated day following monthly
payment due date.
Branch Payment / Internet / Phone Banking
Fortnightly - on the second nominated day following the
monthly payment due date.
FOR EXAMPLE. The monthly repayment is due on the 24th
and the customer has nominated Tuesday as the
repayment day. If weekly repayments were nominated,
the first weekly repayment would come out of the
transaction account on the first Tuesday after the 24th of
the month following the input frequency. If fortnightly
repayments were nominated, the first fortnightly
repayment would come out of the transaction account on
the second Tuesday after the 24th of the month.
Customers may nominate any weekday (Monday to
Friday) for weekly or fortnightly repayment frequencies.
Monthly repayments ONLY are allowed when paying
interest based repayments.
Repayment method
The monthly repayment is the minimum amount a
borrower is required to pay each month under the loan
contract.
All borrowers should be encouraged to open a St.George
transaction account from which loan repayments can be
deducted.
Manual payments to the loan via these methods are also
available.
(Processing fee may apply)
Principal reductions
Customers with principal & interest repayments may
nominate to pay extra repayments via automatic transfer
from their St.George transaction account.
Additional repayments may be made ‘over the counter’ at
any St.George branch or via Internet or Phone Banking.
(Processing fee may apply)
Redraws
Not available during relocation period.
Reviews
Review of the account will take place at 6 months - the
end of the Relocation period.
For Building loans, the account will be reviewed at 6
months - the end of the Building period and 12 months the end of the Relocation period.
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Serviceability
Serviceability is assessed on the End Loan amount.
Current credit policy applies.
Loan to Valuation Ratio
The maximum LVR is not to exceed 90% (owner occupier
Loans) and 80% (investor loans) at the time of projected
Peak Debt (calculated in the Relocation Worksheet).
The Peak Debt is to be calculated on the outstanding loan
balance on the existing property PLUS funds required to
purchase the new property (less any funds the borrower
puts towards the purchase) PLUS the capitalisation of
interest for six (6) months on the capitalised (bridging)
loan portion. This represents the total outstanding debt
against total security held.
Note:
In the case of Building loans this capitalisation of
interest will be for 12 months.
Valuation
Existing Property
Valuation is to be carried out on the existing property.
Property to be Purchased
Except where not permitted, the purchase price,
excluding the cost of chattels (furnishings), in a contract
of sale may be used to determine the Security Value (SV)
of new residential security property (including approved
land and house packages). Where purchase price method
is not permitted, a short form (standard) valuation report
is to be requested.
Security
Current credit policy applies.
existing properties do not need to be released at the
same time.
Contract of Sale
For all loans except Building loans, provide evidence that
the existing property is listed for sale with a real estate
agent (or satisfactory evidence that the property is on the
market by private sale), prior to providing any form of
approval under this product.
Lenders Mortgage Insurance
LMI is available for this product for owner occupiers up to
a maximum of 90% LVR. It is not available for investors.
The loan is to qualify in accordance with the above LVR
requirements.
Fees
Reference
Refer to the interest rates and fees section of the
website for current fees and charges.
Establishment Fee
Establishment fee applies irrespective of any special deals
for standard variable rate loans except when the “end
debt” portion of the relocation loan is taken as part of the
Advantage Package. In that case, the establishment fee is
waived.
The fee includes the Bank legal fees for one new security
property and any number of existing securities and one
standard valuation for the primary security property only.
Additional security fees are to be collected for each
additional security property, after the first security property.
Settlement Processing Fee
This fee is automatically deducted from the loan at
settlement.
A Relocation Loan will have at least two securities.
Administration Fee
St.George is to hold registered first mortgage security
over all security properties. Any existing mortgages on
security properties are to be discharged and the loans
re-financed.
Refer to individual product specifications.
All properties will be held as security upon settlement of
the new purchase. The existing securities will be released
when the properties are sold and the end loan amount will
be secured by mortgage on the remaining property.
Where there are more than two security properties, the
Building Loans
Progress Payment administration fee - this fee is
automatically deducted from the loan at settlement.
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Interest offset facility
Statement
If the end debt portion of the loan is taken as a Standard
Variable or Discount Variable Rate then customers are
eligible to a Full Interest Offset facility. The offset type is
dependent on repayment type.
Statements are generated every six months. The
statement cycle will be six months from the month of
advance of the loan and every six months thereafter.
• Mortgage Equaliser Offset is available where the
customer has Principal and Interest repayments.
• Repayment Offset is available for interest based
repayments.
Partial offset is no longer available for sale on Relocation
Loan with End Debt.
Interest offset is not available on the capitalised portion of
the Relocation Loan.
If the Full interest offset is taken, a Full Offset Service fee
is payable whilst the facility is current. This fee is debited
to the loan account each month. There is no fee payable if
the loan is taken as part of the Advantage Home Loan
Package.
Up to 99 transaction accounts may be setup to offset the
loan interest provided the Offset Account holders match
those on the Loan Account. Offset Accounts cannot be
linked to multiple loans.
Parties who are not on the Loan Account cannot be
account holders of the Offset Account under any
circumstances.
Investment loans have a statement cycle that coincides
with the end of the Financial Year.
These are the only statement frequencies available.
Borrowers cannot nominate any other frequency.
Customers with CCC-regulated loans can nominate one of
the borrowers to receive statements and notices on behalf
of the other borrowers providing they all agree.
Interim Statements / Replacement Statements
These are available for mailing out on request. A fee is
applicable.
Substitution of security
Not available during relocation period.
Discharge / partial discharge
Discharge of Mortgage fee applies
This fee is payable to the Bank. It is in addition to the fee
for the Registration of the Discharge of Mortgage, payable
to the Land Titles office.
End Procedure – Relocation with End Loan Product Specification
August 2012
End of relocation period
At the end of the relocation period, a partial discharge
transaction is processed to the loan to discharge the
Capitalised Loan sequence. The relocation period will end
at the time the partial discharge payment is made to the
loan. The loan will continue on the selected product.
For further information
www.partners.stgeorge.com.au
Mortgage Central 1300 137 532
This document is owned and updated by St.George Bank Intermediary Distribution and is subject to change. Terms and Conditions and fees and charges apply and are available on request.
All applications are subject to St.George Bank’s prevailing credit criteria. St.George Bank – A Division of Westpac Banking Corporation ABN 33 007 457 141 AFSL and Australian credit licence 233714.
STGW0003 08/11 286185
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