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3.1 General Principles

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The Government has contracted with Westpac Banking Corporation to provide advances to persons entitled to a Defence Service Homes loan subsidy.  When an applicant's entitlement to an advance is established, a certificate of entitlement is issued by the delegate. It is then up to Westpac to determine whether the applicant meets the Bank's lending criteria before it proceeds to fund the advance.  Westpac is required to take security over advances by way of a mortgage over the relevant holding of the person. Where an advance relates to a retirement village, security, if any, shall be at the discretion of the Bank.

Further Advance (Portability) was introduced for advances, except for widow/widower and essential repairs advances, funded after 9 December 1987.  Portability was subsequently extended to advances, except for widow/widower and essential repairs advances, current at 9 December 1987.  Prior to 9 May 1995, the maximum term available under portability was 25 years.  Where subsidy was not payable on 9 May 1995, an entitlement to a further advance is dependent on the used term of the previous advance or advances not exceeding 25 years as at that date.  (See "further subsidised advance").  A Further Advance (Portability) is restricted to an amount equal to the limit on the previous advance at the date the loan account closed for the balance of the  term and at the interest rate applying to that advance.  A Further Advance (Portability) is not available to persons who had been assisted previously and discharged their loan before 9 December 1987.  A further period of qualifying service does not entitle any applicant to further assistance.

Since November 1998, clients with a current loan and who wish to transfer the loan to another home have been able to approach Westpac direct without the need to obtain a Certificate of Entitlement for a Further Advance.  Widow/Widower Advances, Essential Repairs Advances, Home Support Loans and Assigned Advances are excluded from this arrangement.