Becoming full homeowner

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What happens after settlement?

We want you to own your home as soon as you can.

It’ll look different for everyone, but the goal is to do this within 10 years.

To help you with this, we’ll meet with you every year to see how you’re tracking and work with you to achieve the goals of:

- Buying back our share and becoming the full homeowner.

- Keeping your home maintained.

- Helping you with any questions you may have about First Home TOGETHER.

Buying more shares in your home – how it works

We encourage you to buy more shares in your home when you can afford to do so.

The more you buy, the less we own of your home. Ultimately, we want you to own 100% of your home.

  • You can buy back some (or all) of our share at any time, with the goal of buying it all back within 10 years of buying your home.
  • The money to buy more of our share could come from various places: increasing your regular home loan; getting cash from family; a bonus or unexpected cash.
  • Each buy back is a minimum 10% of the latest dollar value of our share in the home.
  • To ensure the house value is fair for both of us, the house is revalued each time you buy back some of our share. You pay the revaluation fee.

Steps for buying more shares

1. House Revalued

We get the house revalued to ensure we're using the latest numbers. You pay the revaluation cost.

2. Calculate value

We calculate the value of our respective shares using the new valuation.

3. Buy Share

You decide how much of our share you want to buy back (minimum 10%).

4. You own more!

You buy back some of our share which changes how much (%) each of us owns.

Buy Back Scenarios

We have two examples to show what it will look like when you start buying back shares to increase your ownership of your home.

Example One - House prices rise

  • You bought a home using First Home TOGETHER for $850,000
  • You own 90% of the house and we own 10%.
  • Based on the house being worth $850,000:
    • the value of your shares in the house were $765,000
    • the value of our shares were $85,000.

It's now been a year since you settled your loan.

A pay rise has meant you have some room in your budget to increase your shares.

You get in touch and let us know you want to complete your first buy back of some of our shares in your home.

 

Step

Scenario Outcome
1. House revalued

When you let us know you want to buy more shares, the house gets revalued to make sure the value of the house is current.

The valuation is done, and the value of the house has increased from $850,000 to $900,000

(up $50,000).
2. Calculate value

We calculate the value of our respective shares using the new valuation.

Based on the new valuation of $900,000:

You own 90%, so the value of your shares is now $810,000.

We own 10%, and the value of our shares is now $90,000.
3. Buy shares

You decide how much of our share you want to buy back. The minimum is 10%. 

You decide you want to buy back the minimum of 10% of the value of our shares.

Based on our shares being worth $90,000, you buy back $9,000

(i.e. 10% of $90,000).
4. You own more

Buying some of the shares changes how much (%) each of us owns.

With your purchase of $9,000, the percentage each of us owns has changed.

The new situation is:

You own 91%, so the value of your shares is now $819,000.

We own 9%, so the value of our shares is now $81,000.

Example Two - House prices drop

As with Example One, we start with your home being worth $850,000: you own 90% and we own 10%.

This time, however, we show what it looks like if the value of your house goes down. After all, house prices don’t always just go up!

This is important because the value of our share of the home cannot fall below a certain level.

The value of our investment will always be the greater of:

  • House’s starting value multiplied by our starting ownership percentage, OR
  • House’s current value multiplied by our latest ownership percentage.


So what does this mean?

  1. You buy your home for $850,000.

Ownership looks like this:

  • You own 90%: worth $765,000
  • We own 10%: worth $85,000 (Deposit Help)


2. You ask to buy some of our shares, so the house is revalued.

It’s now worth $800,000 (down $50,000).

Ownership now looks like this:

  • You own 90%: worth $720,000
  • We own 10%: worth $80,000 (Deposit Help)


3. As the house value has gone down, we apply the formula to check the value of our investment.

Our investment will always be the greater of:

  • House’s starting value multiplied by our starting ownership percentage - $850,000 x 10% = $85,000

OR

  • House’s current value multiplied by our latest ownership percentage - $800,000 x 10% = $80,000.

So in this example, the value of:

  • Our share: remains at $85,000 (10.6%)
  • Your share: is $715,000 (89.4%).