The Better Way
To Buy A Home
Start your home buying journey with a ground lease and more cash in your pocket.
Start your home buying journey with a ground lease and more cash in your pocket.
Worried about the rising cost of homeownership? Here’s some good news: Groundly has created a Better Way to Buy a Home by separating the home from the land it sits on through a modern ground lease, reducing the upfront cost. On average, Groundly customers can save up to 30% on their down payment and 10% on their initial monthly payment. How you use the extra cash is up to you.
Traditional mortgages require homebuyers to take a loan out for the home and the land that it sits on.
Groundly purchases the land underneath your home and leases it back to you at a low monthly rate, so that you only need a mortgage on the home itself.
Lower purchase price for the same home
Lower down payment
Lower monthly payments
Up to
on down payments
Up to
on inital monthy payment
Ground leases historically have been common for religious institutions, government entities and universities, providing a less expensive alternative to traditional mortgages. With a Groundly Lease, while the home itself is owned by the homeowner, the land (lot) is owned by Groundly, who then leases it to the homeowner for a period of 99 years, reducing the required mortgage amount and monthly payments.
Generally, no. A buyer would typically obtain a mortgage loan secured by the home and the buyer’s leasehold interest in the land. The mortgage amount would be lower with a Groundly Lease, leading to lower monthly costs.
Homebuyers benefit through lower down payments and lower monthly payments, which means they can typically purchase homes with a higher price than they would with a traditional mortgage approach. You can choose to prioritize a larger home, a bigger lot, more desirable neighborhood, etc. and you can sell your home at any time without restriction.
Ground rent is set at the beginning of the lease and determined by applying a rate, like an interest rate, to the amount of proceeds paid by the ground lessor to purchase the land. Ground rent payments increase by 2% annually, with an inflation catchup adjustment once every five years based on the Consumer Price Index with an annual cap of 3.0% per year. After the adjustment, the rent continues to grow only 2% until the next catch up adjustment. The inflation catch up adjustment will never increase the annual rent by more than 7.1% in any adjustment year.
Anyone who is interested in reducing their down payment and monthly costs relative to a traditional mortgage should consider a Groundly Lease.
| Traditional Ownership |
Groundly Lease |
Savings | |
|---|---|---|---|
| Upfront Cost | |||
| Purchase Price | $500,000 | $350,000 | $150,000 |
| Mortgage | $400,000 | $280,000 | $120,000 |
| Down Payment Amount (20%) | $100,000 | $70,000 | $30,000 |
| Monthly Cost | |||
| Ground Rent1 | $0 | $438 | ($438) |
| Property Tax | $329 | $329 | $0 |
| Mortgage (5% Rate)2 | $2,168 | $1,515 | $651 |
| Total Monthly Cost | $2,479 | $2,284 | $213 |
1Initial ground rent equal to 3.5% of land price.
2Based on a 30-year fixed rate mortgage with a 5% interest rate.
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| Groundly | |
|---|---|
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