OwnHome vs PublicSquare: Borrow or Build a Deposit

How does OwnHome's Deposit Boost loan work?

OwnHome lends you your deposit. Its Deposit Boost loan covers up to the full 20% deposit and is paired with a standard 80% home loan from one of its lender partners, so you can buy with as little as no deposit of your own. OwnHome holds its own Australian Credit Licence (555197).

Instead of Lenders Mortgage Insurance, you pay a Low Deposit Premium of up to 2.35% of the loan amount, or 2.65% for investment loans, with a minimum of $9,500. It's added to your loan and is fully refundable until exchange. The deposit loan runs for 15 years with principal and interest repayments, and OwnHome says there are no early repayment or exit fees. A buyer's agent service is included.

How does PublicSquare Rent-to-Own work?

With PublicSquare's Rent-to-Own homes, you choose any established or new home listed for rent that you'd love to buy and move in once the owner agrees. There's no deposit, stamp duty or LMI at the start, and PublicSquare acts for you as your buyer's agent.

Each week you pay the listed rent plus deposit contributions of 50% of your first-year rent, which never change and are credited to you as your deposit when you buy. In years 4 to 8 you switch to a mortgage with the lender of your choice. The program runs in Queensland and New South Wales.

What does each cost upfront and every week?

PublicSquare needs about $4,715 before you move in, then $1,059.62 a week. OwnHome needs about $13,925 in cash for stamp duty and buying costs, then about $1,266 to $1,366 a week in repayments on two loans, plus the costs of owning the home.

The deposit loan is the expensive part. OwnHome didn't publish its rate on the pages we read. Hunter Galloway's OwnHome review uses example rates of 9.70% and 13.75% over 15 years, and SBS reported a couple paying 13% on their OwnHome deposit loan alongside a 6.5% mortgage. Ask OwnHome for the exact rate and comparison rate before you apply.

How do OwnHome and PublicSquare compare side by side?

OwnHome gets you a mortgage now by lending you the deposit. PublicSquare gets you into the home now and gives you four to eight years to build a deposit before you need a mortgage.

Who carries the costs and risks of owning?

With OwnHome you carry them from day one. You pay council rates, building insurance, maintenance and repairs, and if interest rates rise, the repayments on both loans rise with them.

With PublicSquare the owner carries them until you buy. The owner pays the rates, building insurance, maintenance and body corporate, and the owner's mortgage is the one exposed to rate rises. Your rent can rise by no more than 4% a year, and your deposit contributions never change. You take on a mortgage, at the rates of the day, only when you buy.

What concerns do people raise about OwnHome?

The main concern is cost: you're borrowing the whole deposit at a much higher rate than a home loan, over a shorter term, on top of an 80% mortgage.

• Savings.com.au notes that the deposit loan's rate is higher than a traditional home loan's, though the total may still cost less than LMI for some borrowers.
• Hunter Galloway's review says the deposit loan's higher rate and 15-year term make its repayment much larger than people expect, and that a standard low-deposit loan with LMI may cost less overall if you meet the minimum deposit.
• You still need cash for stamp duty and buying costs, and every dollar is borrowed, so you start with no equity buffer if prices fall.

On the other side, OwnHome says it charges no LMI, no early repayment or exit fees, and includes a buyer's agent service, and its customers rate it highly. If you'd qualify today and can comfortably afford the repayments, owning sooner means you keep any growth in the home's value.

Which suits you: OwnHome or PublicSquare?

OwnHome may suit you if

• a lender would approve you today and you can comfortably afford repayments on both loans, plus ownership costs;
• you have savings for stamp duty, conveyancing and other buying costs;
• you want to own now, anywhere in Australia, and keep any growth in value from settlement.

PublicSquare may suit you if

• you don't want to borrow your deposit, or don't have cash for stamp duty;
• you want the owner to pay rates, insurance and maintenance, and carry the interest-rate risk, while you build a deposit;
• you want up to eight years in one home, with rent rises capped at 4% a year;
• you want a way out if you can't get finance: the Sell-Back Guarantee lets you request a sale from year 4.

Rent-to-Own has trade-offs too. You can't pay less than the contracted minimum price, so if the market grows more slowly than your minimum you would pay above market value.

What other options should you compare?

If you want a brand-new home, compare an off-the-plan deposit plan in Coposit vs PublicSquare, or a developer's purchase pathway in Assemble vs PublicSquare. For every option in one place, read Rent-to-Own companies in Australia compared.

Written by

Jarrod Wills

Buyer's Agent

Licensed agent · Former mortgage broker

Over 10 years’ experience as a mortgage broker and real estate agent, now a licensed buyer’s agent with PublicSquare since 2021. He has worked on 100+ property transactions and knows the Queensland and New South Wales markets and the Rent-to-Own model well.

Reviewed by

Dean Arnold

Founder & CEO

Licensed real estate agent

I started PublicSquare in 2021 to give homebuyers a real path to ownership without a deposit, and landlords a stronger-cashflow alternative to a standard rental. I hold real estate licences in Queensland and New South Wales and personally review every property that enters the program.

Read more about Rent-to-Own.

This article is general information only and does not take your personal circumstances into account. PublicSquare is a licensed real estate agency, not a financial adviser or credit provider. Consider seeking independent advice before making a decision.