Government Guarantee

Q.  Aren’t bank mortgages safer because they are government guaranteed?

A.  No, bank mortgages are not government guaranteed, only bank deposits are.

Q.  Didn't The Federal Government guarantee the banks and therefore if I borrow from a bank my mortgage is government guaranteed and therefore my house is safer?

A.  No, your house is not safer with a bank mortgage.  Bank mortgages are not government guaranteed, only bank deposits are.  If you default on any mortgage, no matter who the lender is, the security property will ultimately be repossessed to recoup the outstanding debt.  For this reason, it is always in your best interests to never allow your mortgage to be in arrears.

Q.  Didn't the Federal Government provide money for mortgages as part of its stimlus package to help the Australian economy survive the Global Financial Crisis - how does this work with lending and how does it effect my mortgage?

A.  The Federal Government now funds large numbers of mortgages in Australia, as part of its response to maintain economic activity through the Global Financial Crisis.  Most of the funds we administer are currently provided by the Federal Government through the Australian Office of Financial Management and are regulated to protect Borrowers. This has fostered continued competition within Australia's mortgage market and means that your loan with First Australian is very competitive.  The interest First Australian charges on loans is kept to the minimum.  Borrowers at First Australian are charged only what is necessary to raise the funds and administer the loan.  We are here for the long term and we want our Borrowers to be able to meet their obligations as we journey with you to the other side of the Global Financial Crisis.