So — the question on every first homebuyer’s lips — how much do you need for a deposit?
Well, it depends. How much you need for a deposit depends on the lender and their lending criteria. Some lenders may let you borrow 90-95% of your home’s value, so you may only need to save a 5% deposit. That could be as little as $25,000 for a property worth $500,000. Other lenders may have other criteria and demand more.
However — even though we know you’re keen to get into your own home soon— there are good reasons to aim for a bigger deposit. For one, it means you need to borrow less money overall, so your monthly repayments will be lower.
It could also mean that you pay less interest over the life of the loan — if there’s less to pay off, there’s less interest to pay. A large deposit also means that lenders will see you as less risky, so you could be in a better position to negotiate a lower interest rate from the beginning.
Your home loan deposit is likely to be a cash deposit, but there are a few other deposit options that lenders may accept.