No-deposit home loans are re-emerging as a viable option for first home buyers as the nation’s property market heats up in time for the Spring selling season and low interest rates reduce funding costs on mortgages.
Despite a dip in home loans in July, we expect more home buyers to enter the market, attracted by the strong lure of property as an investment. More vendors too are expected to list stock in coming months. Over the month of July, the value of new home loans taken by property buyers dropped modestly by 1.8% to $31.8 billion, according to new data from the Australian Bureau of Statistics (ABS).
The value of home loans for owner occupiers also fell 3.1% to $20 billion in July from June while the value of home loans taken by investors rose 0.5% to $11.8 billion. The overall number of home loans taken by owner occupiers in January dropped 4.2% to 55,010. Much of this reflects the lack of stock on the market in July, but that is expected to change as the Spring selling season progresses.
The home loan market overall is getting more competitive as interest rates fall and more lenders are now offering no-deposit home loans, enabling first home buyers to step into the property market more quickly and without the need for the traditional 20 per cent deposit.
Acuity Funding is involved in arranging zero-deposit home loans on residential property developments in the New South Wales Central Coast region of Wyong and on other residential developments around New South Wales. Such funding is a great option for first home buyers or second home buyers who can’t get a start. There is no mortgage insurance to pay, which alone can save buyers thousands of dollars.