It has some serious backing
With house prices continuing to rise, purchasing a home has started to feel out of reach for most Australians.
Former mortgage broker and investment banker Michael Ragavan has founded a start-up to change this. Our Leg Up helps both aspiring homeowners and established ones who have built up large amounts of equity in their property, ultimately aiming to reduce wealth inequality in Australia through accessible real estate.
“We’ve developed a novel mechanism to unlock Australia’s biggest source of investment capital – real estate,” said Ragavan said. “Our platform is structured so that all our stakeholders win; aspiring homeowners, established homeowners, and banks.
“Our solution aggregates established homeowners who have equity in their property and diversifies them across a pool of aspiring homeowners who have qualified for a prime mortgage but have a low deposit.”
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Typically, aspiring homeowners with a low deposit must pay LMI and are hit with higher interest rates.
Accessing Our Leg Up will provide an alternative that is ‘essentially another tick box’ in a mortgage application, Ragavan says, while saving potential homeowners thousands.
“For aspiring homeowners with a low deposit, e.g. 5%, we help them purchase a property five years faster. For established homeowners, our novel product lets them earn a return on often inaccessible real estate equity without any cash outlay,” he added.
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The product will be made available through mortgage brokers. In the meantime, Ragavan and the team are working closely with banks and legal counsel to ensure the structure satisfies APRA requirements and that it is a product partner banks can offer.
Ragavan has been backed by early-stage venture capital firm Antler.
