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CBA-backed scheme lets you rent your way to home ownership.

A lifeline for first home buyers who are struggling to get onto the property ladder.

Rebecca Pike | Published: Aug 8, 2022

"We had no idea where our child would go to school, what the neighbourhood would be like, where they would grow up."

Buying a home is more than just acquiring an asset. For a lot of people, it is safety and stability for their families. But the dream of owning a home is becoming more and more difficult for people.

For Sydney parents Shwe and Vrunda, having their own home was hugely important for their peace of mind. With a 2-year-old daughter, they wanted to know that they could settle down somewhere for her to grow up.

As career-oriented professionals, it became a balancing act between juggling their careers, looking after their daughter and hunting for somewhere to live. Although they tried to save for a deposit, it felt like it was never going to be enough.

"I think on a scale of difficult to impossible, we were very much towards impossible," Shwe said.
"Especially looking at property prices in Sydney, the deposits are the biggest hurdle."

He said this didn't mean they couldn't afford a home loan. They were spending on rent each month and knew that if they had a home loan to repay they could curb their discretionary spending even more.

But they felt like saving for a deposit was "a dead-end cycle".

"We kept on saving but while we saved, the property prices kept increasing. We were chasing a goalpost that kept moving. It was an infinite loop. We kept on increasing our budget but still couldn't find anything," Shwe said, calling out the additional costs of lenders mortgage insurance and stamp duty.

Light at the end of the tunnel

Also chasing the moving goal posts of a home loan deposit were Courtney and her partner Matt.

The couple had been thinking about buying a house for about a year, but saving for a deposit was proving difficult.

"The more we saved, the more the market moved and so on," Courtney said.
"[Buying a house] was important but it just felt like we would never get there – at least not for a long time."

Scrolling through LinkedIn one day, Courtney saw a post about a new rent-to-buy company receiving funding from Commonwealth Bank (CBA): OwnHome.

Modelled on the rent-to-buy schemes so prevalent in other countries, OwnHome provides an opportunity for struggling homebuyers to live in the home they want to buy while paying towards their deposit.

OwnHome purchases the property acting as the legal title holder, with the clients paying "rent" each week. 35% of those payments go towards the deposit, meaning they can save their deposit while living in the home they intend to buy.

Once the deposit is paid, which can be anywhere from 2 to 7 years, the clients have the right – but not the obligation – to buy the property. They will then move onto a mortgage.

Choosing the right home

As one of OwnHome's first clients, it was a "bit of a leap of faith" but their experience has been nothing but positive. After making their enquiries, Courtney and Matt teamed up with OwnHome to begin searching for property.

"It was really detailed but really collaborative," Courtney said.

"If we were doing it ourselves we wouldn't have any of the detail or information that we had. They were looking at details that as first home buyers we wouldn't have known to look for."

Even when they found the right property, OwnHome handled the auctions, knowing when to step out and what conversations to have pre-auction.

In the end, OwnHome secured a 3-bedroom townhouse in Botany for the pair.

"We have been here a few months now and we still feel like 'oh this is ours'. It's amazing. It's so much larger, we've got outdoor space, it's a great location. It's fantastic," Courtney added.

While a portion of their rent goes towards their deposit, OwnHome almost acts like a landlord. If something needs fixing in the house, they will handle it through their third-party maintenance app.

At the same time, Courtney and Matt are able to act like this is their home. They are undertaking kitchen renovations.

"I know when I talk to people it seems too good to be true but they actually do what they're telling you they do. It's true. We're in a house years ahead of when we would have been and that's phenomenal," Courtney said.

Peace of mind

Shwe and Vrunda also discovered OwnHome but it took them a few months to decide to work with them.

"Buying a house is a once-in-a-lifetime activity and you're mindful of not putting your bets on the wrong horse," Shwe said.

"We had to do a lot of due diligence to make sure what we were getting into was the right thing for us."

And now? Shwe said he hasn't looked back.

After starting the process with OwnHome in October 2021, they were in their new home by December. Shwe said he feels at peace and they have been able to start planning for the future now.

"We were able to get our child in a school nearby for her to go to preschool. We have found a daycare. It feels that things are falling into place and we have a plan in place for the next 5 to 10 years of our life," Shwe added.

The journey to OwnHome

The idea for OwnHome came to co-founders James Bowe (right) and Tim Harley (left) after living overseas for several years where rent-to-buy models are commonplace.
The pair recognised the importance of Australians getting into homes sooner, in terms of both taking advantage of property appreciation and having the security of knowing where they will live.
But they also recognised that the deposit was the biggest barrier for most people.

James said there was a huge "underserved portion of Australians" that don't fall into the criteria for government schemes. The deposit hurdle was causing around 3 in 5 Australians to ask their parents for financial help, which also isn't an option for everyone.

"OwnHome isn't a replacement for a mortgage. It's really a frontrunner to a mortgage," James explained.

"We started with this observation that the deposit is the biggest hurdle. What we have seen is just how broken the homebuying journey is and what we have heard from our customers is how incredible it is to have a trusted partner in your corner."

How does the OwnHome process work?

1. Apply

You can apply for OwnHome in 5 minutes and receive an indicative approval. Just like if you were applying for a home loan, OwnHome will ask all the same questions about expenses and other factors.

OwnHome will then assess your application and circumstances to make sure you're a right fit for the scheme.

2. Search for the right property

OwnHome acts almost like your buyer's agent to find the perfect property for everyone. As OwnHome will act as the legal title holder for a while, it wants to make sure it secures good assets for good prices. It checks that the property and suburb are likely to perform well, which is something a lot of first home buyers don't think about.

3. Buy the property

OwnHome negotiates your purchases, often making great deals ahead of the auction. It handles the research and the paperwork so you don't have to.

4. Move in

Once OwnHome has purchased the property, you enter into an agreement that covers your security deposit and a lease agreement to make sure OwnHome is accountable for all the things it should be, such as strata fees and maintenance.

You're with OwnHome for a term of 2–7 years and are given a schedule of payments that outlines the purchase price, rent and security deposit contributions. At any point after 2 years, you can use your security deposit contributions as a deposit, meaning you can buy the property with a home loan from a bank or other mortgage lender. If the property value increases above the preset purchase price, the capital gains flow back to you.

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