Home Loan Deposit

In the current lending environment most lenders are looking for a minimum 10% home loan deposit, although there are options that allow you to purchase with a 0% deposit with 100% home loan mortgages. Lenders consider several factors to determine the deposit requirement for a home loan:

The home loan deposit is a very important consideration when planning your property purchase. A simple way of calculating the percentage available is to divide the amount you have on hand by the purchase price, and then multiply by 100. For example, you have $22,500 and want to buy a $450,000 home:

$22,500 / $450,000 = .05
.05 x 100 = 5%

Remember, the purchase amount includes ALL fees, such as legal and building inspections, and stamp duties.

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Factors that Affect a Home Loan Deposit

Banking History

One factor that the majority of the general public is unaware of is that who you choose to hold your bank accounts, along with longevity with a bank, greatly affects your home loan deposit requirement. In some cases, holding a credit card with a bank for 1–6 months can reduce your home loan deposit from 10% to 3%; which, based on a $450,000 purchase, is a difference of $31,500. To overcome this factor, we strongly suggest speaking with your mortgage broker at least 6 months prior to your purchase, as this will allow them to offer you more product options when it finally comes to purchasing. If you do not have 6 months, it is still worth speaking with your mortgage broker.

Savings History

If you have over 6 months of savings history, you will probably not have an issue. Savings history requirements vary between lenders and range from 1 day to 6 months. In addition, some lenders will have differing history requirements dependent on how much you have available for your home loan deposit. For example, a 5% home loan deposit may require 3 months, 3% may require 6 months, and 10% may not require a history. As these policies change regularly, we believe it is best to consult with your mortgage broker.

Credit History

If you have a clean credit history—No Defaults—you should not have an issue with obtaining a lower home loan deposit percentage. If you do have minor issues, lenders will most likely require between 10%–15% home loan deposit.

Nil home loan deposit or 100% home loans family guarantee by mortgage

A family guarantee allows certain family members to use the equity in their home as additional security for a portion of your loan amount (normally parents guarantee children, although, in some cases, other people can assist). This means you may be able to buy a property sooner, avoid paying the premium for Lenders Mortgage Insurance and maximise the amount you can borrow.

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