- Many people believe that buying a home is out of reach for young people today.
- We look at a news report of how a young couple bought their first home without a big mortgage.
- By exploring what we can learn from their experience, we want to show more young people that it’s still achievable to buy your own home.
Can you really buy a house without a mortgage?
We all want a place to call our own and young couples are no exception. Nearly 70% of young people want to buy their own home so it’s clearly an important life stage for many.
However, buying a home is becoming more difficult for young people.
The majority of Australians, or 63% believe owning a home is out of reach for young people today. Young people wanting to buy and live in their first home represent fewer than one in three of those owner-occupier loans. Most of us will also spend time trying to save for a house deposit to then show that we can afford to repay the mortgage.
The story on how a young couple bought their first home without a big mortgage:
Given many young people feel despondent at not being able to afford a house, that idea grabs attention. The idea of doing it without a mortgage seems impossible so it also builds intrigue. The full story was covered on the property website Domain on 4 August 2020.
We want to show you how young people are buying houses in different ways.
Here’s what we can learn from their experience:
1. They pooled their resources
Buying a house as a couple has the benefit that two of you are paying for it. That means two savings goals going towards a property. If you did want to get a mortgage, this also potentially you could borrow more with two salaries paying off the home loan.
2. They bought a home even though one of them lost their job
Many of us put off buying a house because the timing isn’t right. When half of this couple lost their job, they turned it into an opportunity as they could show they were impacted by COVID and accessed their super early. Drawing on their retirement savings to use the money now meant they could buy the long-term investment of their first home.
3. Access different government home buyer grants
They researched different government grants and found they could access both state and federal home buyer grants. This included both the state government’s first home owners grant and the federal government’s home builder grant to build their dream home from scratch.
4. They compromised on location
We often hear about how young people can’t afford to buy in their city. This couple knew that they didn’t want a mortgage so looked at different location options. They were willing to move for their dream home and found that they could buy land on town just off the coast on Russell Island, which is a 15 minute ferry ride and 40km from their CBD location.
5. They compromised on location
Many of us aim to buy the biggest house our money can afford. This couple instead went for a one-bedroom tiny home, building additional storage and seating areas outside for added space. The benefits of tiny houses include saving on energy costs as there’s a smaller space to heat and cool. You also require fewer building materials and have less space to fill with things you don’t need.
We’re just trying to come up with options of how to get a roof over your head in a cheap and sustainable way.
That’s what one half of the couple said about their approach to buying a home. By sharing how a young couple bought their first home without a big mortgage, we want to show more young people that it’s still achievable to buy your own home.