A new startup assists Sydneysiders in entering the housing market by allowing them “move-in now, and pay later”.

This is one of most frustrating things young professionals face: working in a high-paying career but not being able to afford their home.
They may be able serve a mortgage but their years of high rent have given them plenty of practice! The biggest obstacle is the deposit.
Many people don’t have enough money for a loan. They are also unable to keep up with the incredible market growth, regardless of how much they save.
Cue OwnHome is a startup similar to AfterPay, but for homeowners. It’s now available. Its tagline is “move into now, make payments later”.
The glossy advertisement promises that they will “save you your dream home, while you still own it, so you can say goodbye the landlord.”
It’s an option for saving and renting.
Tim Harley, co-founder and CEO of OwnHome, said that this website is for anyone who wants to move up the property ladder but is unable or unwilling to rely on their parents.
Zaheer Jappie and Michelle are among OwnHome’s earliest clients.
They moved in to Campbelltown two months ago with their two children.
The couple completed the task without needing to save any significant deposits.
Jappie explained that Mr Jappie is a big believer in having his own space and feeling in control.

How does it all work together?

To purchase a $1,000,000 home, you pay a $25,000 upfront payment. This is significantly less than the $200,000 that you would need to get mortgage insurance from lenders.
OwnHome will buy the property on your behalf, and cover stamp duty and conveyancing expenses so you can move in as soon as possible with a deposit.
“We went to the open houses and we called OwnHome to tell them we wanted to purchase this house. It was done in just a few short days. Mr Jappie stated, “It took only a few hours. It was amazing.”
You will pay $70,000 per year or $1350 per week for a contract that lasts three to seven years.
OwnHome keeps the lion’s share of $45,000 and $25,000 more accumulates annually as equity.
After five years you will have $125,000. This equity could be used to acquire a bank mortgage or transfer title.
The price you pay for your house is determined at the beginning of the contract. This is based on the property’s increasing value at 3.8% per annum.
A $1 million home would be worth $1.2million over five years.
OwnHome then subtracts $150,000 from your contributions to give a mortgage worth $1.05million.
It’s a way of getting in the door, and opening up for potential growth.
Mr Harley stated that “Capital gains are higher than the agreed amount, and you get to personalize your home. So, we have customers who put carpets, taps, and other things that renters can’t do.”
The support of Australia’s largest lender Commonwealth Bank has been given to the company as a vote-of-confidence
Matt Comyn, Chief Executive at Commonwealth Bank, stated that OwnHome was an innovative idea and a great idea.
The problem is that this strategy only works in a growing marketplace.
NAB predicts that Sydney’s house values will fall 11.4 percent due to interest rate increases in the coming year.

What happens if there is a market correction?

The average annual rate is 3.8 per cent.
You could lose your house and any money that you have invested after the contract ends.
James Bowe is co-founder of OwnHome. He stated that there will be market cycles. However, Sydney has experienced incredible growth in the past.
Stamp duty and, if applicable lenders mortgage insurance, will still be due when you purchase the property.
Sally Tindall from RateCity stated OwnHome is not charity. She said, “You have to remember that OwnHome aren’t charity. They’re making money through fees. Not just at the start, but every payment thereafter.”
Rent to own programs in South Australia and Victoria are illegal. OwnHome has taken measures to make sure that your finances can work.
If everything goes according to plan, you can speed up your journey to owning your house. You can save money on the deposit and still live in your home while enjoying capital gains.
However, in a flat or declining market you might end up with nothing.
This is a gamble Mr Jabbie and his family are willing to make.
Mr Jabbie stated that there has been speculation that the property market would crash. However, it has never happened.
He hopes to convert to a bank loan in three years.
The spacious, five-bedroom home is also equipped with a swimming pool.
Mr Jabbie stated, “The children love them.”
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They are living the Great Australian Dream right now.

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