The FinTech Report Podcast: Episode 44: Interview with James Bowe, Co-Founder at Own Home

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Nov 3, 2023

Join James Bowe, Co-Founder of OwnHome, as he delves into how his company is revolutionizing home ownership in Australia. Discover how their innovative Deposit Boost Loan significantly reduces upfront costs, allowing renters to become homeowners. Bowe discusses the impact of rising wealth disparities on access to housing and the innovative commission structures prioritizing client welfare. With ambitious goals to facilitate $500 million in home purchases, he highlights the importance of technology and strategic partnerships in bridging the homeownership gap.

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ANECDOTE

Buyer's Agent Advantage

Customers value the licensed buyer’s agent who advocates for them through home purchase.
Support helps clients avoid poor deals, undetected property risks, and overpaying at auctions.

INSIGHT

Competitive Loan Cost Model

OwnHome’s overall effective interest rate is competitive compared to paying lenders mortgage insurance.
Customers typically repay OwnHome’s second mortgage within 15 years or sooner by refinancing or capital growth.

INSIGHT

Lending Structure and Risks

OwnHome is lender of record for the deposit boost loan, while customers select the first home loan lender.
OwnHome's monthly payment is considered by first mortgage lenders, limiting max combined borrowing in line with affordability.

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Expanding access to home ownership: how Own Home is creating homeowners for the next generation of Australians

James Bowe Co-Founder of Own Home. OwnHome’s mission is to turn renters into homeowners. James background includes over 7 years with Bain & Co in the USA, UK and Europe, and stints at UBS, Macquarie Bank, a Barrister’s assistant and a debating coach.

https://ownhome.com/

The essence of OwnHome is a loan for your deposit - just 2.2% and Stamp Duty to secure a loan up to 100% of the property value.

The example they give is Instead of saving $340K for a traditional 20% deposit on a median-priced home in Sydney, with a Deposit Boost Loan, aspiring Sydney homebuyers need roughly $60K, including stamp duty and typical upfront fees; customers can then access an 80% loan-to-value ratio loan from OwnHome’s list of lender partners.

OwnHome raised a $3.6m seed round in July 2021 (from angel investors plus German based Global Founders Capital, and Israeli based Entrée Capital), and their initial product was a ‘rent to buy’ scheme where ownHome bought the house you, the buyer wanted, rented it to you for 3-7 years while you paid them back at a pre-agreed price -

In 2022 they pivoted to the Deposit Boost Loan - raised a $31M series A from Commonwealth Bank of Australia’s venture arm, X15 Ventures, and as well as Square Peg Capital, Global Founders Capital, Entrée Capital, AfterWork Ventures, and Possible Ventures.

OwnHome say they plan to support $500 million in home purchases over the next 18 months.

In this episode, we discuss:

· Why did James start Own Home? (started with Rent-To-Own, then pivoted)

· What’s the key problem Own Home solves?

· Who are the customers?

· The fundraising journey; how hard is it?

· What’s the business model? Pricing?

· How do people repay the loan?

· What Partnerships are involved?

· Lending – why tier 2 lenders and not CBA?

· Team size?

· Long term vision?