Shared equity loans to become the norm

SHARED equity home loans and other products to help first home buyers afford a home will be "mainstream'' products in five years

House toy /File

Shared equity loans to become the norm

SHARED equity home loans and other products to help first home buyers afford a home will be "mainstream'' products in five years, Bendigo and Adelaide Bank wholesale manager Jamie McPhee said yesterday.

Adelaide Bank was the first bank in Australia to launch a shared equity home loan, in March last year, to make it easier for battlers to get into the housing market.

Their loan product, developed with U.S. partner Rismark International, allows home owners to borrow 75 per cent of the value of their home after putting up a 5 per cent deposit. The other 20 per cent would be covered by what is called an equity finance mortgage.

At a lunch hosted by Finsia - titled Banking in the South Australian Economy 2008-2010 - Mr McPhee said share equity and other yet-to-be-developed products would become mainstream.

"Five years from now they'll be mainstream. It comes from a consumer perspective. In my view its the product of the future,'' he said.

"I would like to think that my kids have the same opportunity to own a home as I did, and that's different from most places in the world,'' he said.

BankSA managing director Rob Chapman said products that let parents or grandparents pledge superannuation or to put in money for homes for their children could be a possibility in future.