More South Australians will be able to get into their own homes sooner, after State Government-backed lender HomeStart Finance dropped the minimum deposit requirement for its Graduate Loan to 2%.
This is the first time HomeStart has offered a 2% deposit home loan and could wipe months off savings plans. For example:
| Purchase price | 3% deposit | 2% deposit | Difference |
|---|---|---|---|
| $400,000 | $12,000 | $8,000 | $4,000 |
| $661,000 | $19,830 | $13,220 | $6,610 |
| $850,000 | $25,500 | $17,000 | $8,500 |
Unlike many commercial lenders, HomeStart also does not require Lenders Mortgage Insurance if buyers don't have a 20% deposit, which can cost in excess of $10,000.
Thousands of South Australians are saving hard to buy a house, and this could make the difference to them taking that step.
The Graduate Loan is available to South Australian residents with a Certificate III, IV, Diploma, Bachelor degree or higher qualification.
The Graduate Loan is available in metro and regional areas, with the home required to be bought or built as the purchaser's primary residence.
HomeStart currently has more than 2,000 Graduate Loans on its books, 619 of them signed in the past financial year.
Of these, 84% were first home buyers, 63% were couples and 42% were for the construction of a new home.
Quotes
Quotes attributable to Peter Malinauskas
Owning your own home is the great Australian dream but saving a deposit can be a sticking point especially with most commercial lenders requiring deposits of up to 20 per cent.
HomeStart's decision to slash the minimum deposit for its Graduate Loan to 2% will mean thousands of dollars less in upfront savings, enabling hard working South Aussies to get a foot on the property ladder sooner.
Attributable to Stephen Mullighan
This reduction provides another important avenue to getting more South Australians into their own homes.
One per cent is a significant reduction when you consider it can wipe months off people's savings plans.
Quotes attributable to HomeStart CEO Andrew Mills
The reduction in the deposit requirement for our Graduate Loan will be life changing for many South Australians aspiring to buy their own home.
Many South Australians are struggling to save enough to pay for the ever-growing deposit on a home particularly from traditional lenders, and rising house prices keep putting home ownership beyond their reach.
The 2% Graduate deposit loan is another way in. HomeStart continues to adapt and innovate to address housing affordability concern and help more South Australians into their own home sooner.
