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Australians who aspire to one day get on the first rung of the property ladder have another option.
As house prices continue to strengthen, many young couples struggle to come up with a deposit, which is why some turn to rentvesting.
This option means aspiring home owners can buy a place in an area they can afford, and rent where they want to live, and the latest Australian Bureau of Statistics numbers revealed 340,000 Australians had used this strategy.
“We’ve seen in recent years saving a deposit for your first home has become increasingly difficult,” Heritage CEO Peter Lock said.
“That has led some people to look at rentvesting, which is a great option for those looking to get into the property market without having to give up the lifestyle they cherish.”
To make this option more attainable, Heritage Bank has provided an option for first home buyers to get their first property as rentvestors.
It is part of the bank’s Family Guarantee, which splits the total amount across two loans, one loan secured by the property being purchased, and the second partially secured by a family member’s property as guarantor.
This option gives borrowers the ability to avoid the need for lenders mortgage insurance. It would also limit the amount of money and risk parents and guarantors need to contribute.
“We believe our Family Guarantee is a great way for first home buyers to enter the property market,” Mr Lock said.
“We want to be able to help them achieve that goal whether they are owner-occupiers or investors, so we’re proud to now offer our Family Guarantee on investment home loans.”
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