Renata and Bruno were ready to give up on buying a home – until they found out about HomeStart.
As the cost of living soars and house prices climb, the great Australian dream of home ownership can feel like it is moving out of reach for many.
Thankfully the State Government has recognised these huge pressures South Australians are under and have introduced several initiatives to help the hard-earned dollars of first home buyers go that little bit further.
We’re talking grants, the abolishment of stamp duty, big land releases, and a home loan through HomeStart, which enables eligible home buyers buying a home to take out a loan with as little as a two per cent deposit.
Read our handy guide to supporting first home owners for extra info.
We spoke to one Adelaide couple who shared their tumultuous – and eventually successful – journey to home ownership.
Last year, Renata Simmons Costa and her husband Bruno Gonclaves were ready to give up on buying a home. Each interest rate hike saw their budget decrease, and any house suitable for their family of four moved further out of reach.
“The process was very stressful,” says Renata. “With rates getting increased, our budget wasn’t enough. We put it on hold for a while, waiting to see what was going to happen to the market.”
With no reprieve in sight, the couple began talking to friends who’d recently managed to buy homes. That’s when they found out about State Government backed organisation HomeStart, and more specifically its Shared Equity Option, which allows buyers to borrow 5 per cent to 25 per cent of the purchase price as an interest-free and repayment-free loan.
Imagine you are buying a house worth $500,000. HomeStart may contribute up to $125,000, leaving you with a loan of just $375,000. Any interest you pay is on your share, not the full $500,000. When it comes time to sell your property, you will pay back the HomeStart loan ($125,000 in this example) plus a portion of the gains or losses.
“For us it’s a good deal because, with our current income, we couldn’t get the house that we wanted. With this plan we were able to get the house with the budget that we were willing to spend,” says Renata.
The couple was also able to take advantage of HomeStart’s Graduate Loan, due to Renata’s various qualifications. This is a low deposit loan available to eligible buyers with a Certificate 3 or higher and can help more people into their own home sooner from as little as 2 per cent deposit and no Lenders Mortgage Insurance (LMI). “This also made our life easier,” says Renata.
Renata, Bruno and their two children are now preparing to move into their home later this year once the current tenant’s lease expires. “I thought it was going to take longer to get a home, but it was just meant to be,” says Renata.
“The dream is coming true.”
A quick guide to the State Government’s support for first home buyers:
First home buyers were one of the 2023-24 State Budget’s biggest winners. Announcements around the abolishment of stamp duty, an increase on the First Home Owner Grant property value cap, the fast-tracking of first home builder approvals, and a new home loan provided enormous relief for thousands of South Australians. Here’s a quick snapshot of what was announced:
- Stamp duty abolished for eligible first home buyers (applies to properties valued up to $650,000, and land valued up to $400,000);
- Property value cap for $15,000 First Home Owner Grant lifted to $650,000 from $575,000;
- Fast-tracking first home building approvals (so those eligible can move into their new home sooner);
- Introduction of a new home loan that will enable first home buyers building a new home to take out a loan with as little as two per cent deposit (more on this below!);
- Around 1,140 additional homes for public housing and 700 new affordable homes;
- Over 25,000 new blocks to be released for housing in Adelaide’s north and south.
Listen to this Hot Topics podcast team go head-to-head on buying new versus buying an established house.
Here’s some more info about HomeStart:
- HomeStart is not a bank. It’s a State Government backed organisation focused solely on supporting more South Australians into home ownership in more ways.
- It offers a range of home loans that can reduce your upfront costs and increase your borrowing power. These include the Graduate Loan, Shared Equity Option, Low Deposit Loan and HomeStart Home Loan.
- Loans to help you boost your borrowing power are also on offer, for example the Shared Equity Option (allows you to borrow up to 25% of the purchase price as an interest-free and repayment-free loan to give you a greater choice of homes in a wider range of suburbs) and Advantage Loan (which offers a borrowing boost of up to $70,000). To further assist you into your own home sooner, HomeStart offer the Starter Loan (a loan of up to $10,000 if you’re finding it hard to save enough for the deposit and upfront costs) and the Wyatt Loan (if you’re on a limited income).
- HomeStart is based in SA, so its employees understand what’s going on in our state. Over the past 33 years, HomeStart has helped more than 83,000 South Australians into home ownership.
- Calculate how much you can borrow here.
There’s no need to feel overwhelmed – it’s pretty straightforward once you know what steps to take. Learn more about support for first home buyers here.