Great Southern Bank helps young families own their first home

Great Southern Bank has welcomed the Australian Government's release of a further 4,651 places today under its First Home Loan Deposit Scheme (FHLDS). Up to 2,326 of the places will be available to non-major banks on the lending panel, including Great Southern Bank.

Australia’s largest customer-owned bank has helped over 2,500 Australians into a home through the FHLDS since January 2020, and a further 500 homebuyers through the Government’s other two schemes, the New Home Guarantee (NHG) and Family Home Guarantee (FHG). The bank already has a waiting list of customers seeking one of the newly announced FHLDS places.

“We see, first-hand, the real and lasting difference this scheme is making to the lives of first-time home buyers who have been able to own their own home sooner,” said Great Southern Bank Chief Customer Officer Megan Keleher.

New parents Sarah Leonard, 26, and Tom Daunt, 29, recently obtained a loan through Great Southern Bank to buy their first home in Newcastle, using the First Home Loan Deposit Scheme (FHLDS). After paying $200,000 in rent over five years and having two landlords sell properties while they were living in them, home ownership means stability for them and their 2-year-old daughter Ruby.

Great Southern Bank is striving to deliver on its purpose of helping all Australians to own their own home. Young families juggling the costs of raising children and unexpected life challenges are a key focus for the bank.

“With house prices rising faster than incomes, saving the deposit for a home has become an increasing challenge for more and more first home buyers,” Ms Keleher said.

“The FHLDS has helped remove this obstacle for thousands of Australians like Sarah and Tom by enabling them to purchase their home with a deposit as low as 5 per cent, without paying out thousands in Lenders' Mortgage Insurance.”

Media contact:

Laurel-Lee Blain
Senior Manager, External Communications
Ph: 0428 602 508
Email: Laurel-Lee.Blain@gsb.com.au

Sarah and Tom’s story – escaping the rental treadmill

Great Southern Bank customers, Sarah Leonard and Tom Daunt recently bought their first home in Newcastle for their young family. To them, the Great Australian Dream was to achieve financial security.

“We did the sums and had spent close to $200,000 in rent over five years,” Sarah said.

“We thought at least if we owned a home, we’d be paying off our asset, not someone else’s.”

The couple began saving in 2018 before discovering Sarah was pregnant with their daughter Ruby. While this threw a curveball at their saving efforts, they doubled down with the hopes of raising Ruby in their own place.

Describing their ruthless budgeting, Sarah shared: “We looked at what our bank accounts were showing and what was important to us. We pulled money back from areas you wouldn’t think about – switching our insurance, electricity and gas providers.”

They were able to keep socialising with friends, which they described as a priority, but reigned it in with more discipline and a strict budget.

“There was lots of spaghetti bolognese and curry for dinners at home,” Tom added.

Despite their strict saving habits, the new parents faced another common challenge. Their previous bank claimed they couldn’t afford a mortgage while Sarah was on maternity leave.

“It was definitely a setback,” Tom said.

“We’d found a house we wanted and it went to auction. We were expecting to hear about our approval two days beforehand, but our old bank sat on it for weeks before coming back and saying they couldn’t help us.”

The pair were house hunting in the height of the COVID-19 pandemic with a then two-month-old and the stress of securing a loan added to an already tough journey. Like many young families, they started to feel like home ownership was slipping out of their reach.

Tom and Sarah came to Great Southern Bank hoping they could help them find a clever solution that capitalised on available Government schemes.

“We couldn’t afford the house we wanted if we’d had to pay LMI (Lenders' Mortgage Insurance) on top of our deposit, because I was on maternity leave,” Sarah said.

“But our lender at Great Southern Bank got us into the schemes and pre-approved in three days. She jumped through hoops to show we could service a loan; it was like she was our advocate.”

Tom added: “We saved about $60,000 through the FHLDS and NSW stamp duty concessions. It was really the difference between us buying a freestanding home compared to a small unit or house way out of town. It’s given us a sense of security as a young family – we know our landlord won’t sell on us and we’re not having to move our two-year-old every 12 months.”

The couple bought where they wanted to live, close to cafes, the beach and parks for their daughter. Sarah and Tom’s savings through accessing government schemes meant they could buy a home and afford to renovate it. The property value has increased by $200,000 and they’ve turned their house into the home they’d always dreamt of.

Sarah and Tom’s top tips for young families

Decide what’s important to you. “If you can just dedicate a little bit of time to review what’s important to you, there are ways you can save. We like the social aspect of our lifestyle, so we weren’t prepared to give it up. However, we allocated a set amount of money to it every fortnight and tried not to exceed it.”
Pull money back from unexpected areas. Sarah’s advice? “I switched our insurance, electricity, water and gas providers. We had a rewards credit card, so we used the points to purchase Christmas presents. Even down to things like saving grocery rewards points to do a whole shop.”
Continue your saving habits after buying. “We thought once we bought our house, we could be a bit more frivolous, but there’s stuff people don’t tell you about. There are maintenance costs and other things. We’ve spent a lot of money, probably close to $20,000 in the past 12 months, just on maintenance costs, nothing that’s aesthetically pleasing to our house. That type of saving hasn’t
stopped!”
Unexpected costs will pop up, it’s all about prioritising. “There are things in your house you can live without. Our oven caught on fire and we managed for a month without an oven! But there are other things like our fence falling down and our neighbour wanting to replace it, so you have to have the money saved for those unexpected events.”
The tough journey is worth it! “Every house where you put in an offer, you visualise yourself in it, so it’s quite emotionally draining. You become quite distant. After we put in about 20 offers on other properties, this was the one property that we felt like we could make our home. We didn’t want to set ourselves up for disappointment, so it was sheer elation when we got it.”

About Great Southern Bank

For over 75 years, we’ve been putting our customers first, and today we look after the financial needs of more than 375,000 Australians. We have changed our name from CUA to Great Southern Bank but we remain customer-owned and firmly focused on helping all Australians own their own homes.