With home loans becoming more difficult to get and interest rates and stamp duty pushing up the cost of homes people are reluctant to subscribe to the maxim “stop paying wasted rent.”   But the reality of the need for high down payments and stringent terms and conditions set by banks and traditional lending institutions have left people wondering if they should rent or buy a home.  On the other hand, more and more houses enter the market and remain unsold due to the increasing foreclosures and reduced buying interest.  Many Australians will go on renting homes for a major part of their lives unable to meet the costs of home ownership. The fact that home affordability is still difficult is confirmed by the recent research by the Real Estate Institute of Australia (REIA).  Mortgage payments require 35.2% of the median family incomes to repay mortgages. This situation hurts the first home buyers the most.  This study further reveals an intriguing fact that retirees who are not home owners need to have about $300,000 built up as additional savings with 5% interest per annum for meeting rental cost alone.  This makes it essential to own a home and stop paying wasted rent.

Most of the state governments have a first home buyer’s grant and concessions in stamp duty rates. There are exemptions in the case of some categories of residential properties.   In today’s grim scenario of difficulty in accessing finance for home ownership, many private lenders and real estate investors have worked out several innovative schemes to induce some movement in the housing market. Down payment has been the major concern for accessing home loans.  The private lenders offer no-deposit loans that may have slightly higher rate of interest but ultimately lead to home ownership while making you stop paying wasted rent.  There are different ways of financing a home such as tent to own and vendor finance homes.  These schemes usually require a small or no deposit and an additional rent premium towards owning the home at a later date.  This facility allows you to pay off the home while living in it paying rent under a legal agreement.  The price of the house remains unchanged till the end of the agreement period.  There are many different options open to those who seriously want to stop paying wasted rent.  

By paying off a home mortgage you are building wealth in the property.  The long term benefit is that the home value may increase over many years. You are forced to make payments to the home mortgages with your disposable income which you may spurge.  Many programs have reduced interest rates and some other programs that allow the seller to pay your down payment and the closing costs of the purchase of your home. The mortgage amount you may pay towards home ownership will build equity in your home and you enjoy living in your own home while you are paying off the home mortgage.   But if you go on renting in the normal way there is no equity any other benefit except the right to occupy the house.  Another advantage is some people can write off their mortgage interest in their tax returns. This savings makes it more affordable to buy a home and stop paying wasted rent all your life.