Rising rents and a competitive property market might make owning a home feel out of reach, but it doesn’t have to be. With careful planning and determination, 2025 could be the year you transition from renting to owning. Here’s how to make it happen.
The Costs of Renting vs Owning
Renting has its advantages, but homeownership offers long term benefits:
- Rising Rents: Australia’s national rental vacancy rate remained low in 2024 due to slow construction activity and migration, which caused a significant increase in rental prices in many Australian cities. Owning a home provides stability and shields you from market fluctuations.
- Building Equity: Unlike rent, mortgage repayments contribute to owning an asset that can appreciate in value over time.
Saving for a Deposit
Building a deposit is often the biggest hurdle, but it’s achievable with these strategies:
- Set Clear Goals: Calculate how much you need and create a realistic savings plan.
- Use High Interest Accounts: Park your savings in accounts with competitive interest rates to maximize growth.
- Cut Expenses: Review your insurance policies and compare quotes to find cheaper options to reduce repayments. Review your bank and credit card statements to identify unnecessary spending and redirect that money towards your deposit.
Preparing for Homeownership
Once you sort out your deposit, take the following steps:
- Check Your Credit Score: A strong credit history improves your chances of securing a loan with favourable terms. Your credit score has a significant impact on your financial life. You can access your credit report free every three months from the Equifax website.
- Research Suburbs: Utilise tools available to look for areas with good growth potential that fit your budget. Consider factors like commute times, schools and local amenities.
The Buying Process
Understanding the buying process can make the transition smoother:
- Pre-Approval: Pre-approval is an important step before you start looking for a property because you know your borrowing capacity and it strengthens your position as a serious buyer. Learn more about home loan pre-approval.
- Home Loans: Contact a broker to explore first-home buyer loans, lenders and other support available via Government schemes.
- Professional Help: Engage real estate agents, mortgage brokers, solicitors and building inspectors to guide you through the process.
Homeownership is a significant achievement that offers financial stability and personal fulfilment. With the right strategies, 2025 can be your year to make the leap from renting to owning. Contact a mortgage broker today to start your journey.
