Is it better to buy a home now or to save a larger deposit?
By saving a 20% deposit, you can avoid paying Lenders Mortgage Insurance but by delaying your purchase you’ll pay more in rent. In the meantime, house prices may grow out of your reach.
Find out which option is best for you using our simple calculator.
Tips for using this calculator
Are the properties in your area increasing in value? The long term average growth for most capital city locations is around 8% per annum. Our calculator will use the average growth in your state over the last 25 or 50 years.
Hover your mouse over the ‘?’ icons in our calculators to find out additional information about how to use the calculator.
When is it better to save rather than buy?
It’s worth pointing out that, having a bigger deposit (low LVR home loan) will give you the best deal on your home loan. But waiting to save up that extra cash may not always be feasible.
You’ll find that in most cases, it makes more sense to buy now rather than to save a larger deposit. This is because the cost of LMI is typically much less than the growth rate of a property.
However, if your local area isn’t increasing in value then there’s no harm in waiting. You can delay your purchase while you sure up your financial position. Just make sure you have a savings plan and stick to it!
If the market is falling then of course, don’t buy! Waiting will obviously leave you in a better position but try not to listen to the media. Instead you can determine the market direction by looking at reliable sources such as RP Data, Residex and Australian Property Monitors (APM).
Our mortgage brokers have a paid subscription to APM and if you’re one of our clients, we can provide you with free property reports and data. Please call us on 1300 889 743 or enquire online to find out more.
How can I find the lowest LMI premium?
Not every lender has the same LMI premium rates. We’ve created a mortgage insurance calculator which compares lenders and lets you know if you’re eligible for any LMI discounts/waivers.
Can I borrow 100% with no LMI?
Yes, you can. However, you’ll need the support of your parents guaranteeing your loan. The lender will use your parents property as additional security for your loan so you won’t have to pay LMI.
You can read more about this option on our guarantor mortgage page.
There is also the very in-demand federal government’s First Home Loan Deposit Scheme which allows first home buyers to borrow up to 95% of the property value without paying LMI.
Apply for a home loan today
Speak to one our expert mortgage brokers on 1300 889 743 or enquire online today and we can find out which lenders can approve your loan.