Sooner or later?

  • How do you know when should you buy and what is the right home loan for you?

    Let’s take a look at Sam and Jo to see what a HomeStart loan could do for you, compared with a bank home loan.

    Sam and Jo have found the perfect home for $400,000. Their combined income (after tax) is $90,000, and they have $35,930 in savings.

    With HomeStart, Sam and Jo need less money upfront to cover their deposit, fees and charges to buy their dream home. And they’ll also build more equity sooner, for opportunities later on such as moving to a new family home, or buying an investment property.
  • HomeStart
    Other lender
    They have enough savings to get into a home sooner, with HomeStart!
    3% deposit $12,000
    Fees & charges $23,930
    They don't have enough savings to buy a home with another lender.
    5% deposit $20,000
    Fees & charges $32,000
    A bit later
    They make loan repayments, which helps to build equity in their home.
    Loan repayments $2,097/month
    Ownership costs $250/month
    They keep renting and putting away their savings.
    Rent $1,367/month
    Savings $980/month
    5 years later
    While enjoying their home, they've also built more than $100K of equity. Time for an investment property?
    House value $486,000
    22% equity $105,562
    The house price went up, but after years of saving they have enough to buy their home, and now have 5% equity.
    Rent paid $80,000
    House value $486,000
    5% equity $23,000
  • So in the end, Sam and Jo got into their own home, either way, and are enjoying all the benefits of home ownership.

    But, HomeStart can get you into your own home sooner.

    How did we do the math? We used online bank calculators to compare HomeStart’s fees, charges and monthly repayments. We also based our calculations on the assumptions below*
*As of June 19, 2015
  • HomeStart’s upfront costs estimate includes stamp duty, conveyancer fees, HomeStart’s Loan Provision Charge and other fees and charges.
  • Ownership costs estimate includes council and water rates, maintenance costs, building insurance, based on 0.75% of property price (not including costs you would also pay while renting such as electricity)
  • Rent growth by 4.00% p.a.
  • Investment rate 4.00% p.a. based on intial investment of $35,931, investment income taxed at 25.00% p.a.
  • House value based on appreciation of 4.00% p.a. as an estimate of prospective long term capital only property growth.
  • Bank upfront costs based on fees and charges including stamp duty, Lenders Mortgage Insurance required with non-HomeStart Lender, and is an estimate only based on online bank calculators as of 24 June 2015.
  • HomeStart ongoing loan costs based on a standard HomeStart variable rate home loan starting at 5.54% with loan repayments indexing by 2.50% on the anniversary of the loan, borrowing $462,328
  • Bank ongoing loan costs based on a standard variable rate of 4.60% on a 30 year Loan Term borrowing $462,670 at year 5.

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