The award-winning EFMs are an important new development in the housing finance landscape with the potential to completely revolutionise the way Australians think about home ownership.

Launched in March 2007 by Rismark International and Adelaide Bank, EFMs are the first "shared equity mortgage" to be ever made available by a private lender in Australia's history.

Under an EFM, the lender shares in the gains or losses on the home owner's property instead of charging a normal interest rate. This means that there are no repayments made whatsoever by the borrower until they decide to repay the entire EFM amount at any point over its 25 year term.

EFMs were originally designed and developed by Rismark International on the basis of a revolutionary suite of affordable housing ideas first unveiled by the 2003 Australian Prime Minister's Home Ownership Task Force (click here for a link to the Task Force's radical report). For more information on the Task Force's pioneering work, please refer to the Press Articles section of this website.

The central motivation behind the EFM was to transform the relationship between the borrower and lender: instead of the home owner paying, say, 8% per annum in interest and principal repayments every month for 30 years irrespective of their financial position, the idea behind the EFM was to create a much better alignment of interests between borrower and lender.

With an EFM, the lender only does well if the borrower does well. If the borrower does badly, and the value of their home rises slowly, or, should they be particularly unlucky, the value of their property falls, then the EFM lender shares the pain with them.

The EFM is completely unique in comparison to all other loans insofar as if the home owner suffers a loss when they decide to sell their property and repay the EFM, the EFM lender will bear some of that loss with them (assuming that they are not in default!). This means that the amount the borrower actually repays the lender could be less than what the lender originally advanced them. And if there is no growth in their property's value, they simply repay the original principal amount with no interest whatsoever.

Recent Political Support for EFMs

In a bi-partisan show of support, both the Australian Labor Party and the Liberal Party have expressed considerable interest in the development of the EFM.

In fact, the Australian Labor Party’s New Directions for Affordable Housing paper specifically references Rismark International’s EFMs as a solution to Australia's current housing affordability crisis.

The Federal Minister for Housing, Tanya Plibersek, has also been publicly quoted supporting shared equity. To take just one recent excerpt from the Sydney Morning Herald: “Opposition housing spokeswoman Tanya Plibersek today called for lenders and the Federal Government to consider shared equity schemes to help first-home buyers. “We are looking at something called shared equity, where the banks or the Government would own a piece of a person's home so that the person has to borrow only, say, 75 per cent of the value of their home,'' she said. "That's something that a number of the states are already doing and it's another way of reducing monthly mortgage repayments.”

Since the launch of Rismark’s EFMs there have also been calls from Federal Liberal Party MPs for the Federal Government to do something about shared equity. By way of example, on the 14th of August 2007 the following article appeared in the Australian Financial Review: “Shared Equity Plan Tackles Housing Affordability…Government backbenchers have urged Prime Minister John Howard to act on housing affordability, warning the issue is hurting voters…At least half a dozen MPs asked Mr Howard to consider a “shared equity” plan…MPs said Mr Howard and Treasurer Peter Costello responded positively to the plan, which was first proposed by the Menzies Research Centre.”

Intellectual Property

Rismark's intellectual property relating to the EFM product is protected by eight (8) fully examined and certified innovation patents, which were granted to it by the Australian Patent Office. These patents are: Australian Innovation Patent No. 2005100 871, Australian Innovation Patent No. 2005100 869, Australian Innovation Patent No. 2005100 868, Australian Innovation Patent No. 2005 100 867, Australian Innovation Patent No. 2005 100 865, Australian Innovation Patent No. 2005 100 864, Australian Innovation Patent No. 2007100448 and Australian Innovation Patent No. 2007100445. 

Rismark is committed to fostering EFM opportunities, and if you would like to explore the possibility of licencing Rismark's intellectual property, please do not hesitate to send an email to info@rismark.com.au.

For more information on Rismark International, please click here.

Note:  EFMs are also sometimes known as equity mortgages, "shared equity" loans, shared appreciation mortgages (incorrectly, since under the EFM the lender may wear depreciation!), or silent partner loans.

Please carefully read and review the EFM Disclosure Document available on this website or through one of our accredited lenders. This website does not take into account your personal objectives, financial situation, or particular needs. You should obtain a copy of the EFM Disclosure Document (available on this website) and the EFM Terms and Conditions Booklet from one of our accredited lenders and consider them before making a decision about whether to enter into an EFM.