A guide for renters looking to buy

A guide for renters looking to buy

What to consider before you buy.

Jess Dickers
Jess Dickers 01 Jun 2024 ・ 2 min read
home-loans

Stepping onto the property ladder is a significant goal for many Australians wanting the stability and equity of a long-term investment.

If you’re thinking about making the move from renter to homeowner, let’s explore current considerations and opportunities.

Navigating market trends

Increased interest rates have put pressure on the market, resulting in rising rental prices. This is combined with the number of available rentals not meeting demand.

If you’re saving for a home deposit, now could be a good time to explore your options. The sooner you enter the property market, the faster you can start reducing your own mortgage, rather than a landlord’s.

A long-term investment

Buying a house is generally seen as a stable long-term investment because the value of the property is likely to increase over time.

As you pay off your principal, you’ll be creating equity which could potentially be the key to buying another property or larger investment in the future.

Alternative deposit options

While increasing property values are great for homeowners, it could mean the price to buy becomes more expensive. Some borrowers might wait until they have a higher deposit before starting to house hunt, but in the time it takes to save a 20% deposit, prices could further rise.

Some lenders, like Liberty, offer alternative options including low deposit home loans to help you get into the market sooner. These allow you to borrow up to 95% of the property value to help kick start your homeownership journey.

Lending costs such as Lenders Mortgage Insurance (LMI) could also be added into your loan and paid over time. This could mean you might not have to save as much for your deposit.

Embracing stability

Renting offers flexibility because you’re not locked in beyond your current rental agreement. However, there is the risk the landlord doesn’t renew your lease.

In comparison, homeownership offers security. Some lenders will also consider past rental payments as evidence you’ll be able to service a mortgage.

Next steps?

In the journey to homeownership, it can be helpful to seek expert advice. A Liberty Adviser can help you discover how much you can borrow and guide you on the path forward.

Reach out to a Liberty Adviser today to start exploring your property options.

Jess Dickers
Jess Dickers Author
Jess Dickers is a writer for Liberty with more than eight years’ experience in media and publishing. She is passionate about using content to help people get financial. When she’s not writing, you can find Jess planning her next travel adventure or hosting games nights. Jess has a Bachelor of Journalism from Monash University.