Moving up: the millennial lending opportunity

Pasquale Caia, State Sales Manager – Victoria/Tasmania - ORDE Financial

Australia's seven million millennials are entering their forever home years. Here's how brokers can help them get there.

Demographic shifts mean brokers should start preparing for a step-up from first homes to forever homes.

Over 90% of first home buyers depend on a broker to help them navigate the unfamiliar process of buying a property. But that purchase is usually just a stepping stone – and the next one can involve far more time pressure and complexity.

According to our Outlook Australia research which we developed alongside Bernard Salt, Australia’s seven million millennials will enter their 40s over the next decade. That’s the decade many start to raise families, move into school zones and buy their forever homes – typically with an upsized loan.

This generation enjoys more flexibility over both income and location. They don’t necessarily need to be close to work, but they often need space for a home office. Parents with small children are also increasingly likely to be self-employed – or take on contract work – to manage the childcare juggle. Millennials may also be early beneficiaries of Australia’s largest intergenerational transfer of wealth, with the Bank of Mum and Dad motivated to keep their grandkids close.

All of this is likely to change the lending landscape.

Lending needs your millennial clients have right now

Millennial borrowers are earning more, owning more and balancing more. They might have dual income, but it’s less likely to be straightforward PAYG. For many, the family home purchase will involve two transactions at once – selling what they have, while buying what they need.

The stakes are high, and a moving mistake can be costly.

Brokers play a vital role in future-proofing these decisions – working through complex scenarios and finding alternative solutions. For brokers, the biggest shift is the need for more flexible structuring – with opportunities increasingly coming through in bridging and construction lending and how borrowers contribute to a purchase, including gifted funds and more complex or non‑standard income.

Bridging the timing gap

Finding a forever home isn’t easy. In a competitive market for family-sized properties, your clients may need to move fast – and they might not be ready to sell.

Bridging is an undersold product, and it’s often misunderstood. It removes the timing pressure to sell, giving your clients time to increase the value of their existing property. The interest is capitalised into the loan, along with all other costs – the new property purchase, the existing mortgage, stamp duty and legal fees. No repayments are required during the bridging period.

ORDE assesses serviceability on the end debt, not peak debt. Our Bridging Calculator can help you work out what this means for your client. If they sell quickly, there are no penalties – and once the sale occurs, the debt immediately reduces and converts to a standard home loan. No rework, no additional documents.

This works for downsizers too. I recently helped my father-in-law move closer to us, and we wanted to spend 12 months improving his property before he sold. We found his ideal home faster than we thought and a bridging loan was the answer.

Building the forever home

When my wife and I bought our family home, we were more attracted by the land than the house itself. We’ve since knocked down and rebuilt our forever home – and I’d expect a growing number of priced-out young families to consider doing the same.

ORDE’s construction lending supports building or renovating a family home or purchasing and building on vacant land. We can work with owner-builders and self-employed borrowers and provide guidance on valuations and progress drawdowns.

Structuring the deal when it’s not straightforward

Next home buyers may have built some equity to help them make their move, but gifted deposits are increasingly part of the picture.

ORDE’s flexible approach to assessment means we can also accept gifted deposits, provided the funds are unconditional and don't require repayment.

Brokers need to provide documentation showing the source and intent of the gift, and confirm the funds are available on settlement day.

Fast, digital and still human

Millennial borrowers expect a digital experience without losing the human touch. They want speed and efficiency, from application through the loan documentation – and that’s where a digitally-enabled lender can make all the difference. It also means you can serve clients who are interstate or moving to a regional area.

We’ve had deals settle same day, thanks to digital signatures and a proactive Settlements team. If the borrower happens to be on holidays on settlement day – which happens more often than you’d think – they can still sign online.

From broker to advocate

The transactional approach is long gone. Successful brokers are asking the right questions, thinking strategically and building a trusted relationship through every life stage. They’re not just helping clients get the keys – they’re setting them up for future success.

Are they planning to start or grow a business? Expand their family? Switch schools? Buy an investment property? Put a tenant in their first home? These decisions affect income and expenditure, and how you time or structure a loan.

Life moves fast. Beyond the anniversary call, check in on their previous plans and be proactive with options. That call or email might just be the moment they need you most. From separations to surprise pregnancies, new business ventures to helping aging parents downsize, brokers are there for the moments that matter.

And when you’re their advocate and guide, the referrals follow across the generations. It’s exactly why we’re built for brokers - because you’re built for your clients.

Read more about the demographic shifts impacting Australia’s home loan market in the Outlook Australia report here.

Learn more about our products, including bridging and construction loans, here.

Get accredited with ORDE today here.