How much of a deposit does a first home buyer need?
The first question a lot of "First Home Buyers" ask is how much they need for a deposit.
The first question a lot of "First Home Buyers" ask is how much they need for a deposit.
Right off the bat – You’re going to need a minimum deposit of 5% of the property purchase price, saved by yourself.
But why?
1. Unfortunately, you can’t borrow every cent for a new home, and the bank does need to see that you have some funds to put towards the purchase (At least 5%).
You are allowed to use a "gift" from parents too, and if you keep this in your account without touching it for 3 months, then you get the green tick also.
2. You need your deposit to show to bank that you can save and sustain a savings account – You might have never borrowed before! And so they need to see that you’re able to manage your money without too much pressure.
Keep in mind: A deposit of less than 20% will probably mean that you’re going to pay Lenders Mortgage Insurance (Aka LMI) – This is very common for First Home Buyers!
TIP: We calculate all of our funding positions for our customers with every cost in mind.
We always consider things like:
Don't worry about remembering all the jargon we'll coach you through it when the time comes.
We don't want surprises come settlement day.
