SA’s low-deposit lender HomeStart is opening doors for more home buyers than ever before, offering hope in a seriously challenging housing market.
At a time when the housing market seems increasingly out of reach for many, HomeStart is proving to be a game-changer for many South Australians, whether they’re a first home buyer or starting over. The government-backed lender has set a new lending record in the 2023/24 financial year, providing $1.2 billion worth of loans to help thousands of South Australians achieve their dream of homeownership.
This means HomeStart settled 2,869 new loans last financial year, the highest level of lending since 2006 and a massive 40 per cent increase from the previous year.
But it’s not just the overall numbers that are impressive – HomeStart’s focus on first home buyers is paying off. Lending to first home buyers surged to 1,905 loans in the 2023/24 financial year, the highest since 2001.
This surge was partly fuelled by the state government’s abolition of stamp duty for first home buyers who buy or build a new home. All up, around two-thirds of all new HomeStart customers were first home buyers over the past financial year.
What is HomeStart and why is it different?
HomeStart isn’t your typical lender. Backed by the South Australian Government, HomeStart breaks down barriers to make home ownership possible for more people in more ways through low- deposit loans and other options to boost borrowing power and help reduce upfront costs.
One of the key differences is HomeStart’s approach to mortgage insurance. While most lenders require Lenders Mortgage Insurance (LMI) for loans with a loan-to-value ratio greater than 80 per cent, and pass on the cost to customers, HomeStart simply doesn’t require LMI. This may save home buyers thousands of dollars in upfront costs.
HomeStart is based in South Australia, so its employees understand what’s going on in our state. Over the past 35 years, HomeStart has helped tens of thousands of South Aussies into home ownership.
How can HomeStart help new home buyers?
If you’re a first-time buyer feeling overwhelmed by the property market, HomeStart offers several options to make your dream of home ownership more achievable:
- Flexible loan options: HomeStart offers a range of home loans to suit different circumstances, including the HomeStart Home Loan, Graduate Loan and Low Deposit Loan.
- Low-deposit loans: Most lenders require a deposit of at least 20 per cent, but Homestart’s three flexible loans allow eligible buyers to start out with as little as two, three or five per cent. This can significantly reduce the time needed to save for a home.
- Shared Equity Option: When applying for one of HomeStart’s home loans, this innovative option allows buyers to borrow up to 25 per cent of the purchase price as an interest-free and repayment-free loan. This can increase your borrowing power and give you access to a wider range of properties.
- Starter Loan: If you’re still struggling to save enough for a deposit and upfront costs, HomeStart’s Starter Loan can provide up to $10,000 to help you get started. This additional loan is interest-free and requires no repayments for seven years.
- Repayment Safeguard: A unique benefit of all HomeStart loans is the Repayment Safeguard where repayments only change once a year in line with inflation, regardless of changes in interest rates.
- No Lenders Mortgage Insurance (LMI): HomeStart doesn’t charge LMI, which can save you thousands in upfront costs.
Getting started with HomeStart’s calculators
Ready to take the first step towards home ownership? HomeStart’s online calculators are a great place to start. These tools can help you get a clearer picture of your borrowing power and what your repayments might look like. Here’s how to use them:
These calculators are easy to use and can give you a good starting point for planning your home purchase. But remember they’re just estimates – for a more accurate assessment, you’ll need to speak directly with HomeStart.
The bigger picture: South Australia’s commitment to home buyers
HomeStart’s success is part of a broader strategy by the South Australian government to tackle the housing crisis and make homeownership more accessible. The 2024-25 State Budget includes:
- Scrapped stamp duty for first home buyers on all new homes, including houses, flats, townhouses and apartments.
- Removal of the property value cap so more South Aussies can access the First Home Owner Grant of up to $15,000.
- $843.6 million to deliver an additional 2,383 homes in greater Adelaide.
Plus, its Housing Roadmap outlines an even broader strategy to tackle the housing crisis from every angle, with faster planning, more affordable housing, the largest ever land release, infrastructure investment, skills development and more public housing.
Find out more about HomeStart here.
