Housemates seen as good way to help pay the mortgage

Hoping to pay off your mortgage faster? Getting housemates in could be one way to go about it. Picture / Jason Oxenham

Hoping to pay off your mortgage quicker or simply ease the burden of repayments? Getting housemates in could be one way to go about it - given you've secured enough money for a deposit.

Given today's property prices, especially in Auckland where the average national price has tipped over the $1 million mark, aspiring young home owners are forced to give up their dream, rely on family or wait much longer before getting into their first property.

However, for those lucky enough to save for a deposit, or be given a helping hand by their relatives, property experts said sharing the burden is "sensible".

The national residential manager for real estate agency Bayleys, Daniel Coulson, said bringing in housemates could help buyers pay off the mortgage more quickly on a reasonable-sized property.

"For many New Zealanders, living in a house-share is a rite of passage. It's also the best way they can save money for their first home.

"Although an apartment may be the cheaper option upfront, buying a house will set them up nicely when they no longer want to share and wish to settle down and start a family."

Bayleys estimated the "average" weekly repayments of $731 on an four-bedroom property in Henderson, with a five-year fixed-rate home loan of 4.99 per cent, could see owners pay only $191 a week, if the three remaining rooms were rented out at $180 each.

Trade Me Property's head of product, Alistair Helm, said it made "absolute sense" to get in flatmates to alleviate the mortgage burden.

"You benefit as the prospective owner getting support and these people are renting a room and getting it at market rates."

However, Helm said property owners shouldn't expect to make a profit on renting out their spare rooms.

"Rental yields are very low at the moment; you'd need to buy an almost four-bedroom property and rent out all the rooms and live in the attic [to make a profit]."

Property Institute chief executive Ashley Church said there were pros and cons for home owners renting out their rooms.

He said the "obvious" pro was that it helped offset the mortgage. "So from that perspective it is tempting."

On the other hand, Church said, you'd be sharing your home with others, which could give the potential for conflict and potential tax implications.

But he said of most concern was the potential to get locked into a situation where you were reliant on house-mates.

"That's the one I'd be most fearful of," he said. "If doing it to increase income to justify paying off a mortgage and interest rates were to increase you could actually find yourself locked into a situation - where you can't have your house back [to yourself]."