You can now buy now, pay later your property purchase

author-avatar By 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
Advertised rate Comparison rate Monthly repayment Rate TypeOffsetRedrawOngoing FeeUpfront FeesLVRLump Sum RepaymentAdditional RepaymentsPre-approval

VariableMore details
GET A FULL OFFSET ACCOUNT FOR NO EXTRA COST

Low Rate Home Loan - Prime (Principal and Interest) (Investment) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
GET A FULL OFFSET ACCOUNT FOR NO EXTRA COST

Low Rate Home Loan - Prime (Principal and Interest) (Investment) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
VariableMore details
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Investor, Principal and Interest (Refinance Only)

  • Refinance only. Fast online application
  • No Nano fees. Free 100% offset sub account
  • Mobile app, Visa debit card & instant payments
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Investor, Principal and Interest (Refinance Only)

  • Refinance only. Fast online application
  • No Nano fees. Free 100% offset sub account
  • Mobile app, Visa debit card & instant payments
VariableMore details
AN EASY ONLINE APPLICATION

Yard Investment Loan (Principal and Interest) (LVR < 80%)

  • No application fee
  • Unlimited additional repayments
  • Unlimited free redraws
AN EASY ONLINE APPLICATION

Yard Investment Loan (Principal and Interest) (LVR < 80%)

  • No application fee
  • Unlimited additional repayments
  • Unlimited free redraws
VariableMore details
FREE REDRAW FACILITY

Smart Investor Home Loan (Principal and Interest) (LVR < 80%)

  • Option to add an offset for 0.10%
  • Fast turnaround times, can meet 30 day settlement
  • No on-going or monthly fees
FREE REDRAW FACILITY

Smart Investor Home Loan (Principal and Interest) (LVR < 80%)

  • Option to add an offset for 0.10%
  • Fast turnaround times, can meet 30 day settlement
  • No on-going or monthly fees

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 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. Rates correct as of October 27, 2021. 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 which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:

  • The big four banks are: ANZ, CBA, NAB and Westpac
  • The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2020. They are (in descending order): Great Southern Bank, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
  • The larger non-bank lenders are those who (in 2020) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.
  • If you click on a product link and you are referred to a Product or Service Provider’s web page, it is highly likely that a commercial relationship exists between that Product or Service Provider and Savings.com.au

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.

In the interests of full disclosure, Savings.com.au, Performance Drive and Loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.

*Comparison rate is based on a loan of $150,000 over a term of 25 years. Please note the comparison rate only applies to the examples given. Different loan amounts and terms will result in different comparison rates. Costs such as redraw fees and costs savings, such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.

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author-avatar
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 is passionate about breaking down complex financial topics for the everyday consumer.

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