How Much Deposit Do I Need?
The deposit you will need depends on a variety factors, from the type of property you intend to purchase, to your personal circumstances or the type of home loan you’re after. For an owner occupier purchase, you will typically require at least 5% of the property’s value as a deposit.
A Deposit For Your Specific Situation
If you would like to talk to us confidentially about your loan deposit or the home loan options that are in your best interest, call us on 13 LOAN (or +61 2 9249 3739 for international callers) or email us the form below and we will return your contact within 2 business hours.
No Deposit Home Loans
If you have good cash flow (a good income) but low equity (deposit), you may want to consider getting a no or low deposit home loan. These loans allow you to borrow a large percentage of the purchase price and are available for both new and established housing, either owner occupied or investment. True 100%, no deposit loans are currently unavailable.
‘No Deposit’ however relates only to the mortgage. You will still have to pay for your lender’s mortgage insurance (LMI), solicitor’s fees, property stamp duty and your moving costs.
Lender’s Mortgage Insurance
If you have less than 20% deposit, you will almost certainly have to pay Lenders Mortgage Insurance (LMI). There are however some lenders who may allow a 15% deposit without charging you LMI and you should talk to your mortgage broker about these options.
Lenders Mortgage Insurance is a one-off payment by the borrower to the lender (or lender’s insurer) to ‘insure’ a home loan. LMI insures the lender for a situation where if you were sold up because of defaults, the difference between what your property is sold for and the amount still owing is covered. Be aware that Lenders Mortgage Insurance does not provide any protection to borrowers. Lenders Mortgage Insurance insures the lender, not the borrower.
More information and home loan help
For more information on how and where to find a better home loan deal from an extensive panel of Australian banks and secure mortgage lenders, or to speak to your local area mortgage expert, contact us on 13 LOAN (direct +61 2 9249 3739)
