What’s the right home loan deposit to have?

What’s the right home loan deposit to have?

Many first home buyers struggle with knowing how much money they should have as a deposit.

Fortunately, there are no hard and fast rules when it comes to home deposits.

A summary of the list of grants that are available currently can be viewed here

What lenders want

Ideally, lenders would like you to have a 20% deposit.  In other words, if you are looking to purchase a home worth $500,000, you should come to the table with savings in excess of $100,000.

The money you have saved will not only fund your initial contribution to the purchase price of a property but it will also be used to pay for stamp duty (where required), as well as any other fees and charges associated with buying a home.

What if you don’t have a 20% deposit?  Don’t fret.

Many lenders will take a significantly lower deposit of 5% or 10% of the value of your desired property – provided you meet their specific lending criteria.

Of course, if your deposit is less than 20% of the value of your home, you will be required to pay Lenders’ Mortgage Insurance or LMI.

Another option is to seek assistance from your parents by way of them being a Guarantor on your loan