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.

How much of a deposit does a first home buyer need?

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:

  • Conveyancing costs
  • Little government costs like "Stamping Fees" or "Mortgage Registration Costs"

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.

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