While every client we sit in front of is truly unique, there are similarities we see in their situations.

In this example, we were working with a client who was a young professional in her late 20’s with her scenario as follows.

  • Paying rent of $450 per week, living near the city
  • Earning a healthy income of $90,000 p.a
  • Has an active social life, which involves brunches on the weekend with friends and a few dinners out during the week

…but she was struggling to save towards a deposit. She was stuck in the ‘rental trap’.

Many of her friends were starting to buy their own homes, while some were getting into the market by purchasing an investment property… but she was being left behind.

The Challenge

  • How to save for a deposit while still renting?
  • Rising prices in the Sydney market
  • Will a home loan compromise her lifestyle and mean cutting back on having an enjoyable time with friends?

The Solution

  • Set a budget in place: we measured what was coming in (i.e. her income) and what was going out (i.e. expenses)
  • A monthly budget check-in was agreed upon and she now became accountable for her savings target
  • As for her home loan options, we worked out how much she could borrow, how much she could purchase for, and budgeted for all the additional costs (such as stamp duty and legal costs).
  • We then discussed options to fast-track her purchase, which included:
    • A cash gift from her parents; or
    • A security guarantee using her parents’ property; or
    • A servicing guarantee which eliminated the need for Lenders Mortgage Insurance; or
    • Using her rental payments as genuine savings

Once she was educated on her options, this gave her the confidence to start looking at properties within her price range and to start negotiating with real estate agents

The Outcome

  • Within six months, the client had gone from being stuck in the rental trap to now owning her own property and learning how to pay this debt down
  • She has also learnt the importance of keeping to her budget, using an offset account, and becoming empowered with her finances