The homeownership rate among Australians aged 25 to 34 has dropped by over 25% since 1981. A significant barrier to owning a home today is the upfront costs. Most traditional home loans, especially those with an 80% Loan-to-Value Ratio (LVR), require a 20% deposit. In addition to this, buyers must cover expenses such as stamp duty, taxes, and registration fees, which can push the upfront costs well beyond $200,000.
Without a 20% deposit, borrowers typically need to purchase Lenders mortgage Insurance (LMI), which can add thousands to the total cost. Additionally, many lenders impose higher interest rates on low or no-deposit loans, making the process even more challenging.
For those looking to buy a home but struggling to save a full 20% deposit, OwnHome offers an innovative solution through its Deposit Boost Loan. This product is designed to assist buyers in securing a low deposit home loan without the need to rely on the “Bank of Mum and Dad.”
The OwnHome Deposit Boost Loan covers the 20% deposit typically required by lenders, allowing buyers to pair it with a standard 80% LVR home loan from any other lender. This reduces the need for costly LMI and provides access to better interest rates compared to typical low deposit or no-deposit home loans.
By using the OwnHome Deposit Boost Loan to secure a low deposit home loan, buyers can take advantage of several benefits, including:
A perfect example of how the Deposit Boost Loan can support buyers is the story of Shwe and Vrunda. After moving to Australia in 2020, they struggled to save for a deposit while managing everyday expenses. Despite earning good salaries, they found it difficult to accumulate enough for a standard 20% deposit to secure a home loan.
With the help of OwnHome's Deposit Boost Loan, they were able to buy a three-bedroom home in Sydney's Epping suburb, paying just a 2% starter fee. This significantly reduced their upfront costs, and the couple was able to secure an 80% LVR home loan without needing LMI. They found that the structured repayments made it easier to manage their finances and save for other expenses.
In the last year, the Consumer Price Index (CPI) saw a 5.1% increase, the largest surge since 2000. This rising cost of living has made saving for a 20% deposit more challenging. By the time many buyers reach that goal, home prices have risen further, making it even more difficult to afford their dream home.
A low deposit home loan option like the OwnHome Deposit Boost Loan allows buyers to enter the market sooner, avoiding the lengthy process of saving for a full deposit. The 2% starter fee significantly lowers the upfront costs, providing a much faster route to homeownership.
The OwnHome Deposit Boost Loan streamlines the process of securing a low deposit home loan. Buyers can start by obtaining pre-approval online and then submit a formal application with proof of income and other financial documents. Once pre-approved, a licensed OwnHome buyer’s agent will help you select a property and navigate the purchasing process.
OwnHome’s buyer’s agents provide expert advice on property selection, market appraisals, negotiations, and auction strategies. This service is included in the 2% starter fee, saving buyers additional costs that would typically be incurred by hiring a separate buyer’s agent.
The OwnHome Deposit Boost Loan offers significant cost savings compared to traditional low deposit home loan options. Here's how:
The OwnHome Deposit Boost Loan is an excellent option for those with a stable income and good credit history who are struggling to save a full deposit in today’s market. With access to lower interest rates, no LMI, and the support of licensed buyer’s agents, it’s a compelling alternative to other low deposit home loan options.
To be eligible, you must have sufficient income to service both the Deposit Boost Loan and the 80% LVR mortgage, and an excellent credit history. You'll also need to cover the 2% starter fee and other associated costs such as stamp duty and conveyancing fees.
In today’s competitive housing market, securing a low deposit home loan can be challenging, but OwnHome offers a streamlined solution that eliminates the need for a 20% deposit and expensive LMI. By opting for the Deposit Boost Loan, you can enter the market faster, avoid high upfront costs, and benefit from competitive interest rates.
If you’re considering a low deposit home loan, speak to your UNO broker to explore the OwnHome Deposit Boost Loan and compare it with other options available in the market. This tailored guidance will help you decide if this innovative product is the right fit for your homeownership goals.
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