Other ways to buy your home

There’s more than one way to buy your home.

Buying a home is one of the biggest financial decisions you’ll make in your life. It’s also one of the most exciting! But it’s not the only way to become a homeowner. If you’re struggling to save for a deposit, or you’re not sure if you qualify for a traditional home loan, there are other options available to help you achieve your dream of homeownership. From government schemes to shared equity arrangements, there are a variety of ways to buy a home that you may not have considered.

1. Government schemes

We all know how competitive the housing market is in Australia – and the government is no exception. Both the federal and state/territory governments offer a range of guarantees, grants and other support programs to help those struggling to afford their own home.

Whether you’re a first home buyer or a single parent looking for a family home, these programs will help boost your savings, cut upfront costs, and get you into your home sooner.

2. Low deposit solutions

We know that saving the usual 20% deposit can be a real challenge, especially for first home buyers. To help take some of the pressure off, we’ll sometimes agree to provide you with a home loan even if you have a smaller deposit. If so, we’ll likely ask you to buy Lenders Mortgage Insurance, a one-off, non-refundable payment to help minimise our risk when loaning to you.

If you need LMI to buy your property, we’ll calculate the amount you need based on the size of your deposit and how much you’re looking to borrow – the more you can contribute to your deposit, the lower the cost of LMI.

3. Guarantor support

Saving a deposit is hard work, and it’s what keeps many of us from being able to buy sooner. But if you’re lucky you might be able to get a leg up with a bit of help from your family. With a Family Guarantee your parents or other immediate family members can use the equity in their own property as collateral for your home loan.

If you’re in a position to make use of this option, it can help reduce the amount of time you spend saving for a deposit, while avoiding the need to add to your upfront costs with Lenders Mortgage Insurance.

4. Rent to own

Getting into property doesn’t have to mean breaking the bank. Remember, your first home doesn’t have to be your only home. Many young Aussies are using their first property as a way to build equity that they can use for their own home further down the line. That way, you can buy something more reasonably priced while you build wealth to afford the home of your dreams.

If you decide to go this route, you have more scope for what you buy – considering apartments, land packages, or houses in less popular areas can be good ways to snap a deal. You can always rent in a less affordable area while you use an investment property to build towards your next step.

5. Buy with others

Buying a home on your own can be a big financial commitment. If you’re not sure you’ll be able to save up a deposit or afford repayments, you can always consider breaking into the market with friends or family. This is known as a joint loan and it’s becoming a popular option for young Aussies looking to enter the property market.

If you’re thinking about this path, remember that money can strain relationships. It’s important to seek legal advice, set up clear expectations for how much each of you is putting in, and have a written agreement in place to avoid any stress.

Make the move that’s right for you

Buying a home is a big decision, and there’s no one-size-fits-all solution for how you get there. From government schemes to shared equity arrangements, it’s worth exploring all of the options available to you. Remember, buying a home is a long-term investment and it’s important to find the right solution that fits your current financial situation and your long-term goals.