CBA-owned fintech backs home buying start-up

OwnHome was awarded $150,000 in funding from x15ventures – a fintech firm owned by the Commonwealth Bank of Australia (CBA) – after being declared the winner of x15ventures’ fast-tracked program, Xccelerate 2020.

The program aims to fund and support start-up teams’ growth, including by leveraging CBA’s group assets and strategic partners.

OwnHome, whose co-founders include James Bowe and Tim Harley, is a start-up company that buys a property for the customer, with the start-up owning the title to the home. The customer can move to the home straight away and begin making monthly payments to OwnHome.

The customer can purchase the property off OwnHome within the first two to five years at a pre-arranged price. The minimum lease commitment is two years, while the customer can live in the OwnHome home for up to five years before they must purchase it for themselves.

The customer earns 2.5 per cent per year in their home, which means that after five years, they own 12.5 per cent in their home, which the start-up said is sufficient for the customer to switch to a bank mortgage and convert the title to their name.

The customer and OwnHome would agree on a purchase price (3.75 per cent pre-agreed appreciation). If the property is worth more than the pre-agreed price, the customer would retain the extra value.

According to OwnHome’s website, the start-up is a new option for those who cannot afford the deposit required to avoid punitive mortgage rates and fees.

Speaking about being chosen as the winner of the Xccelerate2020 program, Mr Bowe said: “We’re stoked to receive this grant from x15 and CommBank. The Xccelerate program has been a great experience and it was fascinating to see how x15 is thinking about the many different elements of the customer journey. Finding like-minded partners with the capital and innovation expertise of Commbank is a dream come true, and it means we can achieve our mission sooner.

“We believe that everyone deserves the opportunity to build a life and family in the security of their own home. After seeing so many people we care about making huge sacrifices in pursuit of the great Australian dream, Tim and I were driven to create a solution to this problem, and OwnHome was born.”

More than 80 start-ups applied to participate in the Xccelerate2020 program, with 10 companies shortlisted and invited to attend community days earlier this month.

Four start-ups were invited to pitch their business idea to CommBank’s investment committee. The theme of this event was “helping young Australians get ahead on their finances”.

Commenting on the decision to award the funding to OwnHome, x15ventures managing director Toby Norton-Smith said: “The passion OwnHome has for helping young Australians achieve financial independence and improve their wellbeing was impossible to ignore. We’re thrilled to be working with them.

“Xccelerate is a unique proposition in the sense that it offers start-ups an opportunity to experiment with their idea, learn from leaders in the venture world, and secure funding to help them take their business model to the next level. At x15ventures, we believe in empowering innovators to reshape banking as we know it, and OwnHome is a start-up that is really challenging the status quo.

“It’s been a tough year for the country, but it is the young Aussies who have really been struggling. Many are out of work or considering delaying major life goals such as home ownership due to the coronavirus pandemic, and it’s something we’re looking to solve through Xccelerate.”

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Malavika Santhebennur is the features editor on the mortgages titles at Momentum Media.

Before joining the team in 2019, Malavika held roles with Money Management and Benchmark Media. She has been writing about financial services for the past six years.