Aussie home owners brushing up on Home Loans 101
Westpac’s latest Home Ownership Report shows eight in ten (84%) Next Home Buyers (NHBs) are taking steps to better educate themselves on home financing
- Almost half of NHBs do not exactly understand some key home financial concepts, such as ‘equity’ (49%) or an ‘offset account’ (48%)
- Over half (56%) of NHBs admit they are too scared to purchase at auction
New findings from the latest Westpac Home Ownership Report reveals eight in ten (84%) Next Home Buyers1 (NHBs) are taking steps to better educate themselves on home financing in preparation for their home ownership journey.
This group is turning to professionals (73%) and leveraging digital resources (40%) to better understand what is involved with buying or financing a home, and 43 per cent consider themselves financially confident.
However, the report, which surveyed over 1,000 Australian home owners, identified education gaps amongst Next Home Buyers, including:
- Almost half (49%) of NHBs did not know exactly what equity is
- Almost half (48%) of NHBs did not know exactly what an offset account is
- 41 per cent of NHBs did not know exactly what refinancing is
Will Ranken, Westpac’s General Manager of Home Ownership, encourages all buyers, no matter where they are on their home ownership journey, to continue to stay informed.
“It’s encouraging to see the majority of home buyers are already making the most of available resources to get up to scratch on key home loan concepts. However, more can be done to ensure Australians are fully equipped to achieve their home ownership goals,” commented Mr Ranken.
“With the right help and guidance, the process of buying a home can be incredibly rewarding. It all starts with an open and frank conversation with a professional to identify any knowledge gaps. A Westpac Home Finance Manager can help guide homebuyers through the process and offer tailored advice to suit their individual needs, and online resources are also available to explain key concepts.”
Westpac’s research also reveals that many NHBs are apprehensive to purchase at an auction with over half (56%) admitting they are too scared, and 46 per cent not confident they know what to do.
1 Next Home Buyers (NHBs) are defined as Home Owner-Occupiers who are either considering, or prioritising, buying a home, upsizing or downsizing.
While auction numbers have declined over the last year against a softening market, the latest figures show an uplift in the number of homes taken to auction, with clearance rates holding above 50 per cent for the first time since September 20182.
“Auctions can be daunting, but again, by doing their homework and being well-prepared, homebuyers can feel confident to make the most of current opportunities,” continued Mr Ranken.
“To ensure the best chance of success, home hunters should observe several auctions before they bid; thoroughly research the property they’re interested in, and ask the selling agent for comparable sales.”
Mr Ranken added it’s also important buyers do research to understand other loan services available to prospective buyers, such as a bridging loan or portability loan.
“A portability loan can be a great time-saver, particularly when already dealing with the emotional stress that can come with moving home. A bridging loan could also be an option if they want to stay in their current property while they build a new home.”