What is the Aussie Equity ESP Plan?

Put simply, in return for Aussie Equity finding the extra money you need for a deposit and settlement costs, you share a portion of the property increase at year with Aussie Equity.

We've called this the Aussie Equity - Equity Share Purchase (ESP) Plan.

Problems saving for your deposit?

As property has become more and more expensive it’s very hard to save a deposit fast enough to buy a property, by the time you get there, the property has moved up further beyond your price range.

Solution to the problem

The Aussie Equity ESP plan is used to overcome this and let you buy the property now. We arrange those extra funds so instead of being frustrated by trying to save, the potential increasing value of the property starts helping you right away and you are the exclusive owner of your own home.

You can pay out the equity share over 5 years by saving the weekly amount to achieve this (there is no interest on the equity share amount), or you don’t have to save at all, you can just refinance the property on the increased value at year 5 or use a combination of the two methods, it's totally up to you.

You get five years of potential property growth before you have to settle the equity share, if there is no increase in the property value at year five
you only have to repay the equity portion advanced to you, not any share of ESP profit if there is none.
If in the unlikely event there is no increase in the property value at year five, the ESP payment can be deferred a further 3 years to allow profit growth
(conditions apply).

You, the buyer(s), are the exclusive proprietor of the property, the lender has a registered financial interest.

Equity sharing is not a “rent to buy” plan

Equity sharing is not “rent to buy” or “lease to buy” or a "Wrap". With rent to buy or lease to buy wrap plans you do not get title of the property until the prescribed payments are made over several years and no security of ownership.

With The Aussie Equity ESP you are the owner on the title from day one. Aussie Equity effectively becomes your partner for 5 years, but we are not on title as an owner. As your partner, we want to be sure you have made a good buy and that you have the best opportunity to make a profit from the purchase immediately. We do this by negotiating the asking price of the property (optional) so you will never pay over the valuation price and often purchase for under valuation if we assist you.

For more information see Rent to Buy vs. Equity Share Purchase.

What amount is the equity share?

How do I know what the equity share amount is? The equity share you pay at year 5 is 40% of the profit (ie. 40% of the amount the property has increased in value at year 5). You keep 60%. If there is no profit at year 5, you just pay back the equity amount originally paid in for you.

The total shortfall between the primary mortgage and the total purchase price is the secondary funding arranged by Aussie Equity. It is split 50% loan and 50% equity input. The equity portion is interest free and the loan portion is repayable over 5 years (ask us for a quote).

How much can I borrow and what rate of interest do I pay?

As each applicants information varies widely it is not possible to give a hard and fast generic quotation here. Much always depends on whether applicants are self employed, salaried, in permanent full time work, or in permanent part time or part time work. We also have to take into account the status of each applicants credit history and the amount of debt they are currently repaying, credit cards, hire purchase etc.

The normal rate of interest for a straight forward application and no credit problems is the best average standard variable rate available on the primary lenders market.

This rate will vary depending on the applicants credit history position and all this is pre quoted at the time the indicative application is completed.

NOTE: The Aussie Equity online application is an indicative application and the result is the indication position only and it is based on the information you have supplied. No verification with credit authorities is, or can be made at this time and is based only on what you have supplied in the Aussie Equity application.

Later if you decide to proceed with a formal application we will require you to sign a privacy authority allowing such credit checks to be made.

The amount you can borrow will absolutely depend on your income and other current debts and this will be advance quoted to you.

The amount of additional funding that is required to complete the transaction will depend on the amount of the primary mortgage obtained for you.

These packages vary widely and are again dependent on the applicants ability to service the loan and credit history. In some cases the LMI insurance premium can be included with the loan (all mortgages are insured in Australia). This is a once off premium paid to the mortgage insurer, this premium protects the lender, not the borrower, in event of non payment by the borrower.

The ESP funding (part by loan, part by equity share) is determined once the Primary mortgage is established, and this funding covers all the other costs including stamp duty, mortgage duty, legal fees etc.

The First Home Owners Grant (FHOG), where applicable, is arranged by the primary lender and is counted in the transaction and can be used to pay the ESP equity share prepayment of $2,750 (inc. GST).
However to establish this information accurately you must make an online application first.

No one can guarantee the growth of your property but for an assessment of property value movements consult the (ABS) Australian Bureau of Statistics.

There are no hidden costs, no loan establishment fees, no brokerage fees. Aussie Equity will however ask you to pay a commitment payment in the amount of $275.00 (inc. GST) when you have found the property you want, we have approved the location/postcode or when you make a formal loan application.
This is not an extra fee it is an advance on the $2,750 and this is called the ESP commitment deposit. If we are unable to set a purchase after 4 months to your satisfaction then that amount is refunded in full (conditions apply - see product infromation).