When it comes to buying a home, bigger is better, right? Maybe not. All over the world, people are changing their attitude to the size of home they live in. This is particularly true amongst millennials, and if you’re looking to build your first home to take advantage of stamp duty concessions and first home owner grants, there may be many advantages to thinking small.
What are the benefits of building a small home?
- They cost less to build because they require less labour and materials
- Can often be pre-fabricated, so can be built more quickly
- A small home requires a smaller plot of land
- They use less energy – it’s easier to minimise your carbon footprint
- Less maintenance costs
- You can pay off your mortgage sooner
What qualifies as a small home?
A small home can be anything from a cabin in the woods to a city high-rise apartment, or a unit in the suburbs. The concept also paves the way for a much more creative approach to home design, and many smaller homes are made from re-cycled materials like old shipping containers, or wood and bricks from demolished homes.
If you’re interested in building a small home, you could consider employing a reputable builder of granny flats and/or modular homes. In Australia there are a great many to choose from, and this option has benefits like helping you build a more luxurious small space home, as you can collaborate on the design. These builders often create small space homes in the factory, then transport it to your site partially built, which helps to save on costs.
In Australia, it can be difficult to get a mortgage for a home or apartment that is less than 50 square meters and many councils will not approve plans to build homes or apartments smaller than this. Before you build or put down your deposit on a small home, you should check with your local council about relevant building regulations in your area and talk with your mortgage broker to ensure finance can be arranged.
What is the Tiny House Movement?
The Tiny House Movement is a group of people all over the world choosing to live in houses or apartments with no more than 50 square metres of interior space. That’s about one quarter of the size of the average home. In the USA, the movement is so popular that it’s driven at least three successful TV shows dedicated to tiny house living. However, here in Australia, if your tiny home has wheels, you could find it bogged down in red tape.
Things to note about building a tiny or smaller home
Almost all councils in Australia treat small homes the same way they would any other building on your property, however if it has wheels it may be considered a caravan or trailer, regardless of whether it is rurally located or in the suburbs. You need to check with local authorities first before you build anything and get the proper approvals on your plans.
Building regulations apply to all homes, not just small homes and ones with wheels. If you are converting a couple of shipping containers into a home, for example, you will still have to ensure you modify them in such a way that your new home meets local building codes.
Additionally, not all lenders have an appetite for financing tiny homes or small space apartments and units. It pays to chat with me, your mortgage broker, about your plans before proceeding. That way, we can get pre-approval on your construction loan with a suitable lender, so you can go ahead with confidence. There are several ways to finance a new-build home, whether it’s tiny or not, so please give me a call today to get the ball rolling.
First Home Buyer Guide
Everything you need to know to buy a property in one easy guide. This guide is packed full of checklists and tools to help you make the right choice.
But the truth is, every additional percentage point in your home loan interest rate could cost you thousands of dollars every year… and as your home loan is most likely the longest loan you will ever have. If it was a short-term loan, it wouldn’t matter as much… but 30 years is a long time to be paying extra money if you don’t need to.
Real estate is expensive so why would you want to pay more than you have to?
Look at the two below examples:
|Term||30 Years||30 Years|
|Total Principal + Interest||$838,800||$890,640|
Total savings: $51,840
A difference of 0.5% in your home loan could end up saving you more than $50,000… which means you could pay it off faster! Like we said, it really adds up over 30 years.
What we’re trying to say is your interest rate matters. You don’t want to pay more than you have to… which is what we’re here to help with.
Our team of mortgage brokers have access to more than 40 lenders and are experts are finding the right lending solution for your needs.