How It Works

What Is Mortgage Alternative?

The basics…

Mortgage Alternative (MA) matches qualifying MA home buying and occupying customers to new and existing homes/units/townhouses of their choice as purchasers under a ten year lease from Assquire® investors. See here for What is Assquire®

An Assquire® investor may have already acquired a property from a builder/developer or from a real estate agent. They could even be a landlord who has become licensed to use the patented Assquire® system because they want the much higher net yield on their investment property, compared to conventional rental income.

Once a customer has been matched to a home, an Assquire® investor will acquire (or in some cases already own) the property. The customer then enters into an MA contract to purchase the home from the Assquire® investor at a pre- agreed fixed price, with settlement to occur at the MA customer’s choice at any time within the settlement period of up to ten years. An MA buyer occupies the home immediately following the exchange of MA contracts and purchase of the home by the Assquire® investor.

Upon moving into the new home, there is a monthly payment to the Assquire® investor, not dissimilar in size to a monthly mortgage repayment plus the usual associated ownership costs such as rates, maintenance, insurance, etc. This monthly payment includes a contribution (approximately 5% of the monthly payment) to a deposit account held in the MA buyer’s name that increases their equity over time. The monthly payment also covers fund investor returns, rates, reasonable body corporate fees, home insurance and maintenance.

Under the terms of the Purchase Contract, customers have the ability to settle the purchase of the home at any time prior to the end of the contract settlement period, which is ten years.

For existing home owners with a mortgage, and looking to trade up, the results of using Mortgage Alternative are dramatic.

As you will see in example 3 below (a $trade up to a $750,000 home), Tom and Jenny would ordinarily be up for a further $29,240 in NSW stamp duty and lenders mortgage insurance of a further $28,373 (of which $15,000 may ordinarily be capitalised by the lender to their mortgage at their new residence). This is all on top of the deposit requirement.

With Mortgage Alternative, there are no such additional upfront costs; only the deposit. In many cases (as with Tom and Jenny), they can now actually move residence.

Example One

Michael and Jane sign a contract of sale with the Fund to purchase the home of their choice with the right to settle in ten year’s time. After year five, Jane inherits $100,000. This inheritance, when combined with the equity they have built up over the first five years provides them with enough capital for a deposit to settle the purchase of their home with a standard bank mortgage.

Example Two

In year six, Michael and Jane decide to pursue a career opportunity interstate and are unsure whether to decline to settle on the purchase of their home or exercise Take Early rights under the contract and pay the pre-agreed ten year price. In this situation, the home is valued at the cost of the Assquire investor and, depending upon the valuation and other factors personal to the MA buyer, they make a decision whether to settle early or exercise their Take Back rights under the Purchase Contract.

If they hand back the home to the Assquire investor with 30 day’s notice, they forfeit their original deposit as well as all of the ongoing monthly Ass quire payments, but their contributions they have made to their Accumulated Savings Account are returned to them. They may also forfeit any unexpended part of their Maintenance Reserve Fund Part A, which is compensation to the Assquire investor for any costs incurred by the investor to refurbish and sell or possibly re-assquire the home. The MA buyer simply vacates the property and walks away, leaving all accumulated capital growth to date with the Assquire investor. Of course, if the property has decreased in value at that time, the Assquire investor is in no different position on their capital loss than if they had rented the property, and the MA buyer has avoided that capital loss.

In the same scenario under a standard mortgage, the losses incurred by Michael and Jane can be quite significant. We have compared the financial outcome of a standard mortgage and Mortgage Alternative under a “fire sale” scenario HERE. The results are dramatic – in the example given of a property market downturn, the loss incurred by the customer under a standard mortgage is higher than Mortgage Alternative by more than $70,000!

This reduction of risk for our customers is unique to Mortgage Alternative and not available through a traditional mortgage.

If Michael and Jane elects to settle early at the pre-agreed ten year price, because that is favorable to them having regard to current market prices, they simple settle early with the Assquire investor, then either relocate interstate and rent the property out, or they make even enquire about becoming an Assquire investor of that same property themselves!

Example Three - Couple Trading Up

Tom and Jenny

Tom and Jenny have 1 child and currently live in Woolongong

On workdays their average car travel is approximately 60 kilometres.

Based on a 48 working week year, in a small sized car the annual cost of this travel is $5,760

In addition, train travel costs $4,080

Assuming Tom and Jenny’s combined gross income is $175,000 this means that their combined income after tax and travelling expenses is $123,132

The long time required to travel to/from work also impacts on family life:

When children have to be taken to child care or school

Sporting activities become more restricted

Interaction with family and friends

Having to “make-up” for lost work time.


By re-locating to Heathcote

On workdays their average car travel will be approximately 40 kilometres.

Based on a 48 working week year, in a small sized car the annual cost of this travel will be $1,440

In addition, train travel costs will be $2,880


Their current property has a market value of approximately $500,000 of which their equity is $125,000

Real estate selling expenses and legals to sell the property will be approximately $15,000

After also allowing $5,000 for relocation expenses Tom and Jenny have $105,000 funds available to buy a new property


New property funded using a conventional mortgage

Assume that the new property costs $750,000

Tom and Jenny will be required to fund stamp duty of $29,240 which means that their remaining equity available after sale of their current property, to invest in their preferred new property is $9,887

Equity of $150,000 is required to avoid loan mortgage insurance. LMI capitalised to mortgage will be $15,000 leaving $13,373 to be personally funded.

All remaining cash from the sale of the current Woolongong residence is used for the deposit of the replacement property in Heathcote


New property funded using Mortgage Alternative

Mortgage Alternative will help Tom and Jenny relocate and also trade-up into a more desirable address or a better property.

Based on their gross income the Assquired property could be valued today at $650,000 – $750,000

No funds have to be spent paying for LMI or stamp duty, leaving Tom and Jenny with spare cash of $52,500 after sale of their Woolongong residence.


Savings arise from living closer to work

Based on a 48 week year, there is a reduction in travel costs of $5,520, a saving over 10 years of $55,200

Using a notional amount of $40 per hour values family commuting time saved Tom and Jenny at $38,400 annually and $384,000 over 10 years.

Comparison of funds used for a property purchase using a conventional mortgage and Assquire®
Equity available following the sale of current residence is $105,000 after agents commission of $15,000 and relocation costs of $5,000
Purchase price for replacement property is $750,000
Using Mortgage Alternative Using a conventional mortgage
$ $
Deposit 52,500 52,500
Transfer fees / Stamp duty 0 29,240
Loan mortgage insurance funded personally 0 13,373
Funds used $52,500 $95,113
Mortgage debt + Loan mortgage insurance $0 $712,500
Funds available for other uses $52,500 $0
Do you want to calculate mortgage payments? No
$750,000 NSW trade-up property Using Mortgage Alternative Using a conventional mortgage
Equity in current house after selling & relocating $105,000 $105,000
Mortgage including capitalised LMI of $15,000 $712,500
Deposit 7% $52,500 $52,500
Personal Funds required for Loan Mortgage Insurance (LMI) $13,373
Stamp duty $29,240
Available cash to spend elsewhere $52,500 $9,887
Monthly MA payment or mortgage payment + ownership $5,176 $5,182
Rates $150
Insurances $300
Maintenance $288

How is this possible?

  • Applicants are required to qualify for Mortgage Alternative under occupancy and serviceability criteria that are similar to a bank loan, but without the same deposit, stamp duty and mortgage insurance requirements.
  • Buyers effectively “joint venture” the purchase of the home with a Mortgage Alternative investment fund (MARF) or Personal Assquire Contract (PAC) investor (e.g. a current landlord who switches to our Assquire system or just a new investor that does not wish to pool into a MARF). MARF’s are to be made up of major Australian superannuation funds and institutions. Any future capital growth is shared between you and either the PAC investor or the fund investors when you settle the purchase from the PAC or Fund.
  • Once buyers reach the end of the contract period, they purchase the property outright from the PAC investor or MARF Fund with a traditional mortgage.
  • In the contract of sale, buyers agree to a purchase price for the home at the time of settlement in ten years. Buyers choose the term they prefer, as they can settle early, but at the pre-agreed ten year price.
  • Buyers move into their new home when contracts are exchanged and the home has been acquired by the PAC investor or MARF Fund. The Assquire investor remains the freehold title owner until settlement occurs between the investor and MA buyer at the agreed purchase price.
  • Buyers make one simple monthly payment until the settlement of their purchase from the Assquire investor occurs. These monthly payments pay for rates, home insurance, agreed home maintenance, a contribution to a deposit account held in the customers’ name (that builds up their equity) and a return to Assquire investors. Mortgage Alternative simplifies home ownership.
  • The monthly payment increases by a set amount each year (pre-agreed up front). This provides buyers with repayment certainty for the contract period, unlike a traditional mortgage that is subject to interest rate movements or fixed interest rates that may be unfavorable.
  • With a Mortgage Alternative product, the contract legal expenses and stamp duty are paid by the Assquire investor.
  • During the time that buyers live in the home, they are building their equity into a higher deposit, so they can potentially avoid mortgage insurance on settlement.
  • If buyers choose not to settle on the home and vacate for whatever reason, they simply walk away after exercising their right to vacate the property and the Assquire investor issues a Notice of Take Back. Customers are provided with 30 days to vacate the property and the home is then sold or acquired by another Mortgage Alternative customer. All capital growth to date stays with the Assquire investor.
  • A forfeiture of the unexpended portion of Maintenance Reserve Fund PART A by the departing occupants acts as a form of provision (for the benefit of the Assquire investor) to make good for any damage caused (not otherwise covered by insurance) on Take Back of the property.
  • If buyers successfully settle the purchase of their home at the end of the contracted settlement period with a standard bank mortgage, the savings components of their monthly payments can be applied (with the deposit and embedded equity from the customers share of capital growth in the interim period) towards a deposit to secure a mortgage.

Are you a first home home buyer or are you trading up?

First Home Buyer

Please refer to the attached First Home Buyer Flyer for summary details.


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Current Home Owner Wishing To Trade Up Or Down

Please refer to the attached Trade up Buyer Flyer for summary details. Tom & Jenny would ordinarily be up for a further $57,000 in NSW stamp duty and lender mortgage insurance (of which $15,000 may ordinarily be capitalised by their lender to the mortgage at their new residence. With Mortgage Alternative, there are no such additional upfront costs. Only the deposit.


Click To View Flyer

Mortgage Comparison

The tables here compare the costs of a Mortgage Alternative arrangement to a 25 year mortgage over the life of our product, including the annual costs for a ten-year contract on a yearly basis. The Mortgage Alternative monthly or fortnightly payment include rates, property taxes, agreed maintenance and insurance (both property and personal) costs, whereas under a standard mortgage arrangement, you are obliged to meet these costs in addition to your regular mortgage repayment.

This means it has effectively cost the MA customer in Victoria nothing for the benefits of ease of exit over the full ten year period, and nothing for the measure of downside property price protection that MA offers.

Furthermore, around $25,000 of the MA payments that a MA customer has paid over the ten years is contributed into a compulsory savings account which the customer withdraws on settlement to contribute to their deposit with the bank.

Features & Benefits – In Summary:

  • You don’t need a mortgage today to buy a home – Contracts protect the MA Buyer – deposit secured and lease registered
  • Lower up front costs – see the flyer here or request a product brochure for full details
  • Stamp duty paid by investor and no upfront mortgage insurance[1]
  • Faster access to home occupation vs saving for a deposit. Move in now, but property settlement deferred for up to 10 years
  • Live in your home whilst you save your full deposit for a conventional mortgage. Ability to settle your purchase at any time within the contract period. 
  • Easier to exit in pre-defined events if your personal circumstances materially change and you can’t meet your settlement obligations (subject to Purchase Contract terms) – Much less risk than a standard mortgage in the event of a fire sale.
  • Fixed monthly payments for the entire term disclosed before purchase
  • No future property price risk – Purchase price agreed at time of signing contracts
  • Pre-agree price is set from an independent valuation of the property today – Less chance of buyers remorse
  • Savings plan included to help you settle at the end of the term
  • Flexibility to settle early[2]
  • Costs similar to a 25 year mortgage + property ownership costs[3]
  • A special Assquire® grant + MA combine to deliver a mortgage up to $20,000 to $30,000 lower in 8-10 years[4]
  • MA buyers benefit from a Maintenance Reserve Fund Part B provisioned and withheld for the first 5 years from the investor’s higher yield and a Part A that may be returned to a buyer on settlement if unexpended – see contracts for details 
  • The Maintenance Reserve Fund is automatically available (subject to pre-agreed terms and conditions) without the need for the usual property management approval delays and hassles and faciltates speedy resolution of repairs and maintenance issues that are the landlord’s responsibility by law[5]
  • Option for up to 10 years insurance for your monthly payments if you lose your job through sickness or accident. Personal insurances can be included in monthly fee. 
  • You can use your death and total and permanent disablement insurances from your super fund to meet the Assquire® system’s insurance requirements
  • New and near new homes to choose from as well as established homes

[1] The only circumstance where lender’s mortgage insurance will be payable is if a property’s 2026 market value at the end of the ten year MA period (or at any earlier settlement time chosen by the MA buyer to settle earlier) is insufficient for the MA buyer to have a 20%+ deposit to gain a conventional mortgage (after taking account of the Assquire® savings plan embedded in your monthly MA payments plus your original 4.5% to 8% deposit (deposit requirements vary depending upon which State you purchase in)). Just like the banks, Haigslea Residential and Mortgage Alternative have no control over future property prices.

[2] no penalty or price adjustment is charged to compensate the Assquire® investor for a early settlement. You simply pay the pre-agreed ten year price early.

[3] On a like for like basis, Assquire® payments are on a fixed formula (subject to limited exceptions set out in the contracts), and indexed by a pre-agreed inflation factor (currently 3%pa) which does not alter for the life of the contract.

[4] Individual cases vary based on different assumptions made as to home buyer status, house price purchased, length of conventional mortgage period, State, and future interest rate assumptions. Actual results may vary from person to person and as economic and property market conditions change over time. Buyers should review their specific contract terms and pricing and seek independent professional advice having regard to their own personal circumstances. A solicitor’s certificate is generally required, to ensure that you understand the features, benefits, rights, obligations and risks associated with using our products.

[5] A separate Maintenance Reserve Fund is provisioned (and in part – Part B -withheld) from the investor’s monthly receipts from an MA buyer, with any unexpended Part A excess on settlement returned to the MA buyer as a settlement adjustment, and any unexpended Part B returned to the landlord/investor after a second independent building surveyor’s report commissioned by HRL at the Fund’s Part B cost is completed at the end of year 5 of occupancy. See contracts for details.