Buying a house typically requires a 20% deposit in Australia, but there are cases where the deposit might get much less. In other cases, you may also get a no deposit loan.
In any case, ‘how much do I need for the deposit?’ is a question that needs a detailed breakdown and in this article, we’ll answer it without any jargon. So, let’s get started.
How much deposit do I need for a home loan?
To know how much deposit you need to buy a house, you need to consider two factors:
Price Range
The primary factor that affects your deposit amount is the price range you are aiming for. Since the deposit you pay is a certain percentage of the house price, the more expensive a house you buy, the more deposit you pay.
You can use a borrowing power calculator to get a ballpark figure of what banks will lend you. We also recommend you use a repayment calculator to check your monthly repayments. These tools help you stay grounded in reality and avoid looking for homes you can’t afford.
Deposit Requirements
The common deposit rate in Australia is 20%. And with a 20% deposit, you avoid paying the Lenders Mortgage Insurance (LMI).
But if saving a 20% deposit is difficult for you, you can go for either a low deposit or a no deposit option to get a loan with as little as 5% deposit.
| Property Price | 20% Deposit (No LMI) | 5% Deposit (With LMI) |
|---|---|---|
| $600,000 | $120,000 | $30,000 |
| $500,000 | $100,000 | $25,000 |
| $400,000 | $80,00 | $20,000 |
Thinking of buying a home?
Learn how to buy a house and avoid costly mistakes in under 2 hours
LEARN MORECosts Other Than Deposit
Aside from deposit, there are other costs associated with homeownership. Here are a few:
Stamp duty
Stamp duty is a government tax you pay when you buy property, and the amount depends on your location, property costs, and whether you are a first home buyer or not.
For example, buying a $600,000 property in NSW could cost you around $20,000 in stamp duty. There are also exemptions you get if you are a first home buyer, especially if you are buying a house below a certain value.
You can use a stamp duty calculator to get an accurate figure of how much stamp duty you need to pay for your property purchase.
Conveyancing And Legal Fees
Buying a home involves legal paperwork, title transfers, and other checks to ensure everything’s in order. And this is where conveyancers and solicitors come in.
You may need to pay anywhere from $1000 to $2000 depending on the property’s complexity and location.
Loan Setup Costs
These are other miscellaneous costs for getting a loan:
- Some lenders charge a nominal application fee.
- You will also need a property valuation and that comes with certain charges.
- There are settlement fees and mortgage registration fees you need to pay separately.
Let us help you decide!
Still not sure how much deposit you need to buy your dream home? One of our Home Loan Experts can help you figure out.
To speak with one of our mortgage brokers, call 1300 889 743 or complete our free, no-obligation assessment form.