New loan helping high-income Australians buy property sooner

News.com.au

11 hours ago

They're earning $400,000 a year and still can't buy a home, and now, a new loan product is helping high-income Aussies beat the biggest hurdle stopping them from getting in: the deposit.
A new fintech-backed product called Deposit Pro, launched by Australian firm Reaia, is offering buyers earning $250,000 or couples on $400,000-plus a way into $2m-$5m properties, without the usual decade-long wait to save a 20 per cent deposit.
It's a bold pitch for a growing class of income-rich, asset-poor professionals who are paying $50,000 to $80,000 a year in rent, while house prices continue to outpace their savings.
Reaia co-chief executive Neil Smoli said that while many still viewed homeownership as a milestone that could be reached by 'just saving harder', the economic reality had changed, even for those on top salaries.
'It's absolutely the new normal,' Mr Smoli said.
'Unless you've got the Bank of Mum and Dad or inheritance behind you, the deposit gap is almost impossible to bridge.
'We've had clients earning $500,000 a year who still can't buy close to work because they're stuck renting and repaying HECS.'
Mr Smoli said the problem was magnified by the limitations of lenders mortgage insurance (LMI), which typically disappears once a property's value exceeds $2m, or becomes prohibitively expensive.
'LMI drops off completely once you hit the $2.5m to $3m mark.
'And if it is available, your allowable loan-to-value ratio falls. Suddenly that 10 per cent deposit still takes a decade to save.'
Instead of offering insurance against a low deposit, Deposit Pro provides a stand-alone deposit loan to help qualified buyers purchase earlier, while still managing their mortgage repayments through traditional lenders.
'It's structured for people who can clearly afford the repayments, but just can't out-save the market,' Mr Smoli said.
'They've done everything right, and yet they're locked out.'
M R Advocacy director and co-founder of Scale Lending Mortgage brokers said she'd seen demand rising sharply from high-income professionals unable to pull together a large enough deposit fast enough.
'If something like this exists and they've got the serviceability, I'd tell them to take it with both hands,' Ms Roberts said.
'The traditional deposit system is broken, even people earning $300,000 are still renting because they just can't keep up with cost of living and savings expectations.'
Ms Roberts said Deposit Pro wouldn't suit everyone, and clients should always compare it to LMI or consider rentvesting in more affordable areas, but agreed it offered a practical solution.
'At least it doesn't involve the government owning half your home,' she said.
'We need more alternatives that don't rely on luck or inheritance.'
Arin Russell Property director and buyers agent Arin Russell said that while most of his clients were buying under $1m, he believed a product like Deposit Pro filled an important gap for time-poor, ambition-rich buyers in prestige markets.
'There's definitely a stigma around LMI,' Mr Russell said.
'So if you've got a genuine alternative that's better tailored for high-end buyers, I think a lot of people would jump on that.'
Mr Russell said younger buyers, especially in the Generation Z and Millennial cohorts, were desperate to find ways to 'hack' the system and enter the market sooner.
'For younger clients, my advice is always the same, get in as soon as you can,' he said.
'Don't wait around for the perfect conditions. Set your goals, optimise your income, and take the opportunity if it makes sense.'
According to Reaia's internal research, there are more than 100,000 Australians earning high incomes but renting long-term because of deposit barriers.
Mr Smoli said the national savings rate — recently as low as 1.2 per cent — was nowhere near enough to keep pace with rising home values.
'This is about offering a genuine path forward for people who've done everything right, got the grades, studied hard, built their careers — and still can't get in,' Mr Smoli said.
'If we keep locking out an entire generation of high earners from homeownership, the social and financial implications will be massive.'