Dear All,
The true cost of a home isn’t just the purchase price. It’s the interest paid over decades of repayments. And that’s where structure matters more than most people realise.
The impact of borrowing less
Most housing conversations focus on interest rates. In a traditional home loan, every borrowed dollar accrues interest from day one.
But the structure behind how a purchase is financed can be more important. With AffordAssist, part of the purchase is structured outside the interest-bearing loan, the borrower immediately reduces the long-term cost of ownership.
Because borrowing less reduces decades of accumulated interest.
Even a small reduction in the amount you need to borrow can have a compounding effect over time.
Borrowing less means:
- Lower financial and emotional stress
- Improved long-term wealth outcomes
- Less interest paid
- Faster equity growth
- Reduced loan risk
- Greater flexibility in future decisions
It’s not just about the point of purchase—it’s about efficiency over the entire journey of ownership. And over time, that difference becomes significant.
Structure matters more than most people realise
Typically, over the life of a home loan, a lender may receive 2 to 3 times the original borrowed amount once principal and interest are fully repaid.
Example 1: $800,000 home loan
- 6% interest — Total loan repayments: $1,726,706
- 9% interest — Total loan repayments: $2,317,314
Now imagine not paying any interest on 10% of your home loan.
Not a reduced interest rate. Not a short-term incentive. Not a refinance strategy.
Just structurally removing 10% ($80,000 or another amount²) of the purchase price from the interest-bearing loan.
With AffordAssist, the $80,000 sits outside the interest-bearing loan structure; therefore, the potential saving¹ could be substantial.
Example 2: $720,000 home loan
- 6% interest — Total loan repayments: $1,554,035 (Savings $172,671)
- 9% interest — Total loan repayments: $2,085,582 (Savings $231,732)
Borrow Less. That is the power of AffordAssist.
¹ Based on loan term, interest rate, and repayment structure. Please run your own scenarios using an online total loan repayment calculator.
² The amount is flexible, typically ranging from 1% to 15% (or more) and is always interest-free.
AffordAssist is an Interest-Free Deferred Deposit Solution
AffordAssist’s industry-leading governance process considers three interconnected aspects of a home loan structure, each essential to building long-term financial resilience and generational wealth:
- Access — A flexible deposit solution, buy with as little as $1,000 (read related article)
- Borrow Less — Borrow smarter, save interest, and build equity faster (read related article)
- Safety — The ability to exit (read related article)
Home loans paired with AffordAssist can help committed applicants.
With AffordAssist, settlements that may not have proceeded can now become possible.
AffordAssist’s proven governance and core service fundamentals may be likened to Credit Risk Transfer (CRT), positioning the service as a viable home loan deposit solution for a lender and LMI.
Please speak with your mortgage broker about a home loan approval paired with AffordAssist, or visit our website for details or to apply.
Regards
AA
B2B – AffordAssist facilitates and oversees the governance process. Are you a mortgage broker, lender, developer, real estate agent, affordable housing advocate, or housing minister? Pair your services with AffordAssist. Join us in our mission to expand access to home ownership. Together, we can make a lasting impact.
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