ACT or Crown Lease
If you are a first-time homebuyer looking for property in Canberra, you may be surprised to know that even if you buy a property in Canberra, you don’t own it. The government does. Instead, you are leasing it and possess the right to use the land. What is a crown lease, and are you able to secure a home loan?
ACT Crown lease basics
When you buy a property in Canberra, you are essentially agreeing to a 99-year lease. You receive a leasehold title and can use the property for 99 years. However, as the end of the lease period approaches, the government will offer you a new residential lease. You can keep the property in the family for years if you pay an administrative fee. If you own property in Canberra, you will have to pay $1 a year in rent for each year you own the property.
Borrowing Amounts
Even if the land you are buying is a leasehold in the ACT, you can still secure a loan. Most banks and other lenders approve loans for the following amounts:
- 95% of the property value
- If you have a guarantor, you can borrow 105% of the value
If you are interested in applying for a construction loan, you may qualify if you meet specific criteria. You can work with a broker to determine your eligibility. If you’re a first-time homebuyer, you may also be eligible for a First Home Owners Grant. For any homebuyer, it may seem frightening to buy a property in Canberra or an ACT leasehold, especially if it is your first home. Working with an experienced mortgage broker can help make the process less daunting. Mortgage Street is a non-bank lender, and our team of brokers can help you find a home loan with the best rates. If you are considering buying in Canberra, our mortgage experts can get you approved for a home loan.