46% of millennials say renting is a waste of money, here’s what they’re doing about it
Despite their love for brunch on a Sunday - and getting the perfect picture of it - millenials are more focused on home ownership than ever.
According to research from customer-owned bank, Gateway Bank, and Genworth Insurance Limited, a massive 94% of millennials believe that home ownership is important, with 58% saying owning a home provides a sense of ‘stability and security’.
Aside from a feeling of security, 48% of millennials also thought that owning property still remained a good investment choice, and almost half (46%) of those surveyed saw renting as a waste of money.
Of the 2,127 millennials surveyed in the Millennial Homeownership Survey, 58% are currently saving up for a home loan deposit, while 40% already own a property with a mortgage.
“It’s clear that home ownership is front of mind for millennials...though it’s more challenging than ever before to get a foot on the property ladder, there are options available that can help millennials achieve their goals sooner,” said Gateway Bank CEO, Lexi Airey.
“Maximising their savings potential by setting up a dedicated savings account with restricted access or by shopping around for the best interest rates could make a big difference.”
“Additionally, first home buyers should look into the government’s First Home Owners Grant initiative and check to see if they’re available from stamp duty concessions.”
Millennials dream of success, but do they have the knowledge to turn it into a reality?
Although it's full steam ahead for many millennials on the track towards home ownership, figures from the survey also revealed that some may be in need of a terminology pit stop.
A considerable 57% of millennials said they had never heard of Lenders Mortgage Insurance (LMI), and for those that had heard of LMI (23%) did not know that it allowed them to purchase a home with a deposit below 20%.
So with the news that millennials could do with a quick lesson on how LMI can help them break into the property market, here’s a quick crash course on all things LMI:
What is Lenders Mortgage Insurance?
Lenders Mortgage Insurance is a one-off payment home buyers are expected to pay if they take out a home loan with a deposit smaller than 20%. LMI is an insurance designed to safeguard the lender if a home owner defaults on their monthly repayments.
How much LMI will I pay?
The total cost of your LMI will depend on a number of factors, such as the amount you are borrowing, your deposit amount and whether the loan is for an investment property or a home you plan to live in.
When will I have to pay LMI?
LMI is typically paid at the loan settlement, though you are able to add it on to your loan amount.
If you’d like more information about LMI and how it differs from Mortgage Protection Insurance, be sure to check out our guide, then once you’re ready to start shopping around on home loans, head on over to our home loan comparison tool!
* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.
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