No-deposit loan offers tempt
A new short-term home loan scheme offered by Home Partners allows people with no deposit or a poor credit rating to buy houses. The loan works in a similar way to car financing: the company purchases the property but the resident makes weekly payments and also pays council rates. The current interest rate is 7.8 per cent which is 1.3 per cent above the standard variable rate. The property title remains in Home Partners' name until the resident refinances or pays out the loan. Since it was introduced in February, 15 families have taken out a Home Partners loan. The Australian Consumers' Association is critical of the product saying that people with poor credit histories or no deposit are clearly a greater risk for both the lender and themselves as borrowers.