KEY POINTS:
Grant Clifton, director of Rent 2 Own NZ currently has a typical rent-to-buy property available at 35a Tudor Road, Henderson with:
* Four bedrooms
* 430sq m subdivided corner site
* Two off-street parks
* Fully renovated a year ago and still in "very good condition"
* Registered valuation (January 21 this year): $345,000
* Minimum option fee (credited towards price on purchase) 2 per cent = $7000
* Rent payments $550 per week including rates, insurance and $90 rent credit (credited towards price on purchase).
In comparison, if a buyer was able to get a 30-year, principal and interest bank mortgage at 7.1 per cent (ANZ 5-year rate) with a $10,000 deposit, here's how the numbers stack up:
* Loan amount: $335,000
* Payments (principal and interest): $519.19 per week
* Principal paid off: $63.63 per week
* Rates and insurance: $41.09 per week
So Clifton says it would cost $560.28 per week (the total of the mortgage, rates and insurance costs) to get $63.63 paid off the house.
"Our payments are less with nearly 50 per cent more credited towards the house price for people who can't get finance right now."
Before signing a contract:
* Ensure you get a current registered valuation for the property.
* Get independent legal advice.
