HOME LOANS

Buy a home at half the cost

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The rising cost of living is forcing Australian families to change the way they live and driving new housing schemes that make buying property more affordable.

Schemes, such as cooperative ownership where costs are shared, are growing in popularity.

While it's increasingly common for friends and family to buddy up and purchase property together, sites such as Home Addressed are providing a platform for complete strangers with a common goal to meet, combine their resources and buy a house together.

"A lot of people who thought [home ownership] might have been not achievable can realistically look at owning their own place now," a spokeswoman for Home Addressed told Today Tonight.

Home Addressed also provides a way for investors to hook up and buy a shared property, she said.

First home buyer Holly McLaren is using the scheme to buy a property in a co-ownership agreement: "A mortgage together is a mortgage halved," she told Seven.

McLaren is not alone; pooling funds to buy property is a growing trend in Australia. Research from Mortgage Choice shows around 66 percent of first home buyers planning to buy this year won't be doing it alone.

It’s not only first home buyers cashing in on half-price homes; older Australians nearing retirement are now able to purchase a property without having to buy the land it sits on in an effort to reduce costs.

Under the scheme, the resident buys the home and takes out a 90-year lease over the land, according to James Kelly, managing director of Lifestyle Communities, which sells such properties in Victoria.

"Typically a house [within the resort-style community] is worth between $200,000 and $240,000 and [residents] pay a weekly rental," he told Seven, adding that rent costs start from around $80 per week.

Similar village-style communities exist in New South Wales, Queensland and Western Australia.

For existing home owners, RateCity spokeswoman Michelle Hutchison, suggests refinancing to reduce home ownership costs.

"For the average-sized home loan, borrowers stand to save tens of thousands of dollars by comparing mortgage options and switching to a better a deal," she said.

For instance, a $300,000 home loan repaid over 25 years at the average of the major four bank's standard variable rate (6.82 percent at the time of writing), costs $2086 per month to service. But by switching to one of the lowest available rates at just 5.62 percent, monthly repayments are reduced by $222, which equates to a saving of over $66,600 over the life of the loan (assuming rates remain steady).

Before taking up a housing scheme, do your homework and seek independent professional advice.