You can now buy now, pay later your property purchase

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on November 13, 2020
You can now buy now, pay later your property purchase

Photo by Waldemar Brandt on Unsplash

Fragmented property platform Bricklet has launched a new buy now, pay later platform to pay for your slice of the investment property pie.

In a 'world first', Bricklet allows fragmented property investors to pay for their 'bricklets' with a buy now, pay later (BNPL) scheme, with monthly repayments made over 18 months.

Typical investment bricks are between $15,000 and $38,000, and investors hold a real title to their part of the property.

Conveyancing fees, stamp duty, and other property costs are also bundled up into a 6% fee, and 10% of the brick price is also paid upfront.

Bricklet is able to be used in conjunction with BNPL only on properties in Brisbane, Sydney, and Melbourne presently.

Buying an investment property or looking to refinance? The table below features home loans with some of the lowest variable interest rates on the market for investors.

Lender

Variable
More details
GREAT INTEREST RATE
  • Option to add an offset for 0.10%
  • No monthly or ongoing fees
  • Unlimited redraws
GREAT INTEREST RATE

Smart Booster Investor Bundle (Principal and Interest)

  • Option to add an offset for 0.10%
  • No monthly or ongoing fees
  • Unlimited redraws
Variable
More details
GET APPROVED FASTER WITH A DIGITAL APPLICATION
  • Split Loan Option
  • Unlimited additional repayments
  • Free redraw facility
GET APPROVED FASTER WITH A DIGITAL APPLICATION

Neat Variable Investment Loan (Principal and Interest) (LVR < 60%)

  • Split Loan Option
  • Unlimited additional repayments
  • Free redraw facility
Variable
More details
BUNDLE YOUR HOME LOAN AND YOUR INVESTMENT LOAN FOR MORE SAVINGS
  • Split Loan Option
  • Unlimited additional repayments
  • Free redraw facility
BUNDLE YOUR HOME LOAN AND YOUR INVESTMENT LOAN FOR MORE SAVINGS

Yard Investor Bundle Loan (Bundled with Home Loan)

  • Split Loan Option
  • Unlimited additional repayments
  • Free redraw facility
Variable
More details
100% FULL OFFSET ACCOUNT
  • Free redraw facility
  • Split account option
  • Unlimited extra repayments
100% FULL OFFSET ACCOUNT

Ocean Investment 60

  • Free redraw facility
  • Split account option
  • Unlimited extra repayments

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of May 18, 2022. View disclaimer.

Bricklet CEO Darren Younger said the introduction of BNPL to the fragmented property sector lowers the barrier of entry to investing in property even further.

“For too long, investment property has been out of reach for many and reserved for an exclusive club who can afford the significant entry costs," he said.

There is 'zero' interest and no early repayment fees, however fragment holders may pay fees if they default on their repayment plan.

On a $38,000 bricklet, with 10% taken off, that's $1,900 a month paid, plus 6% ($2,280) in fees. 

A 'brick' is typically 5% of the overall property price, meaning the holder is potentially one of 20 investors.

See Also: Fragmented & Fractional Property Platforms Compared

According to MoneySmart, the average investment home loan interest rate in September 2020 was 2.90% p.a.

On a $400,000 home loan repaid over 30 years, that equals $1,665 per month, not including any additional fees or stamp duty.

The news comes after a BNPL platform was introduced specifically designed to pay rental bonds.

In May, Bricklet also introduced a 7.5% personal loan through Maleny Credit Union catered towards purchasing fragmented property.

Various consumer groups have pushed for BNPL platforms to be credit regulated like other financial products such as credit cards and loans.

In July, Financial Counselling Australia CEO Fiona Guthrie told Savings.com.au that BNPL should be regulated under the National Credit Act.

“If it looks like a duck, and quacks like a duck, it is a duck. BNPL is credit and should be regulated like other credit products," Ms Guthrie said.

“Because BNPL providers are not regulated, and thus not licensed under the Credit Act, they don’t have to check if you can afford the credit, don't have legal obligations to offer hardship arrangements and don’t have to join the dispute resolution scheme - the Australian Financial Complaints Authority."

In Bricklet's case, affordability checks are done to determine if an investor can use the BNPL platform.


Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered. Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please visit the web site links at the bottom of this page.

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Harrison is Savings.com.au's Assistant Editor. Prior to joining Savings in January 2020, he worked for some of Australia's largest comparison sites and media organisations. With a keen interest in the economy, housing policy, and personal finance, Harrison strives to deliver and edit news and guides that are engaging, thought-provoking, and simple to read.

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