Like Afterpay, but for houses
Rent-to-own scheme paves way to home ownership without hurdle of hefty deposit
Kane Templeton spent 10 years living in share houses across Brisbane and the Gold Coast before getting a leg up into home ownership – without the bank of mum and dad.
Mr Templeton, 28, sidestepped the hurdle of saving for a hefty deposit through a rent-to-own scheme recently launched in Queensland.
OwnHome helps customers get a foot on the property ladder by allowing them to purchase the home of their choice with just three per cent deposit.
The customer can then move into the property straight away and build their security deposit through fortnightly payments, with the option to transfer the title after an agreed term.
Mr Templeton moved into a three-bedroom townhouse at Robina purchased for $610,000 through the scheme in January.
“I moved out of home 10 years ago to go to uni and went straight into share houses,” he said.
“I’ve probably lived in over 15 share house properties all over Brisbane and the Gold Coast, and that whole experience was sort of going from place to place without a clear goal, and you definitely feel you are at the mercy of someone else’s reality when you are living that way.
“The property owner might want to sell, they might want to move back in, and during Covid it was also a challenge having to negotiate going into lockdowns with your roommates.”
Mr Templeton said he prioritised his career over homeownership, directing his savings towards a fintech start-up rather than saving for a house deposit.
Saving for a deposit is often the biggest hurdle to home ownership
“The market was always changing, and to go and save 20 per cent for a house deposit after studying and then working in corporations for nearminimum wage – not many people can save, and then you have to enjoy life a little bit and travel too,” he said.
“I always wanted to have my own space to work, to learn, to have my family come and stay when they wanted to, and I didn’t really know how I was going to do that without liquidating my other business ventures, which I really didn’t want to do, and the current banking model was a bit cooked.”
OwnHome was founded in 2021 by Tim Harley and James Bowe with backing from CommBank.
Once approved, customers pay three per cent of the value of their home, one per cent of which goes back to their security deposit. That can be used to buy back the home in the future.
OwnHome covers legal fees, stamp duty, pest and building reports and all other associated fees and taxes.
Mr Bowe said the scheme had already helped scores of homeowners during its trial period earlier this year, with most customers middle-income earners who did not qualify for government assistance, but struggled to raise the deposit needed to secure a traditional mortgage with house prices still well above pre-pandemic levels in many areas.