November 24, 2017

Home Loan Deposit Video

To get a home loan, you will need a deposit.

That is a chunk of your own money that you will put towards buying your property.

You can’t get a loan in Australia unless you have a deposit of at least 5% of the property’s value.

But many of the best value lenders will require a larger minimum deposit of 10%.

That means that if you are buying a house worth $300,000, you will need a $30,000 deposit.

If you have more, that is even better because the more deposit you have, the less risk you are to lenders.

This will encourage them to give you a cheaper interest rate.

Having a larger deposit will also reduce the amount of Lender’s Mortgage Insurance you have to pay.

This insurance, which protects the lender, can amount to a lump sum of 2 per cent or more of the property value if you only have a small deposit.

But the cost of Lenders Mortgage Insurance falls as your deposit grows and if have a deposit of 20 per cent or more, you can often avoid it altogether.

Remember you will also have to have money available for stamp duty and conveyancing fees – you can use our home loan calculator in the tools section to get a clear idea of the total cost of buying a property.

Get calculating and good luck with your savings.

 

 

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