If you, like many other people, want to borrow more to buy the home you really want – but aren’t keen on coughing up for bigger home loan repayments – a shared appreciation home loan could be the answer.

HomeStart’s shared appreciation loan is called the Breakthrough Loan. Here’s three things to ask yourself to work out if this loan could be for you.

Do I need to borrow more to get what I want?
If you want to borrow more so you can live in the suburb you want, or have a bigger home – or just any home at all – the Breakthrough Loan could be an option. With the Breakthrough Loan, you can borrow up to 35% more than you’d usually be able to with a standard HomeStart loan.
 
You need to borrow the maximum amount you’re eligible for with the HomeStart loan, then the Breakthrough Loan is added to increase your total borrowing amount. No interest is charged on the Breakthrough part of your loan, and your repayments stay the same as well. In return, you share some of your home’s change in value when it is sold or refinanced.
 
Do I need to reduce my repayments to stay in the home I already have?
If you’ve recently separated and want to stay in the family home, but can’t afford the home loan repayments, the Breakthrough Loan may help. Refinancing with the Breakthrough Loan can help reduce your loan repayments by up to 25% compared to a standard HomeStart Loan. In return, you share some of your home’s change in value when it is sold or refinanced.
 
Am I willing to share some of my home’s value at a later date?
HomeStart doesn’t charge interest on the Breakthrough Loan. Instead, we take a share of your property’s increase in value when it is sold. This doesn’t mean we co-own your home, or get some of the property’s total value – our share is just some of the difference between what your home is worth when you buy it and when you sell it. And if your home declines in value, we share in the loss as well. We do charge a monthly facility fee to cover administration costs.
 
To find out more about the Breakthrough Loan, watch Hatsue’s story. Another alternative to increase your borrowing capacity is the Advantage Loan. It’s an additional loan of up to $45,000 for people earning under $60,000 p.a. after tax. Watch Nyssa’s story to learn more.