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Having a place to call your own, where you can put your feet up and decorate to your heart’s content, is all a part of the Australian dream. If you’re at this point, then you know there are a few things to think about, particularly when it comes to finances.
Saving for a home deposit can be challenging in today's economic climate. Higher living costs and endless personal expenses that you still have to manage on top of saving for a new home can hinder your savings efforts.
However, it’s still very important that you start saving for this deposit. Most lenders might let first home buyers borrow up to 95% of the price of the property, but in the long run this will cost you more.
The ideal deposit when buying a home is at least 20% of the purchase price. For example, if you were buying a home for $500,000 then its 20% deposit would be $100,000. Most buyers aim for 20% in order to avoid paying Lenders Mortgage Insurance.
The more you can pay with your deposit, the less you will need to rely on lenders to help you buy your new home. If saving up 20% of the purchase price proves to be difficult for you, don’t worry. Most lenders want to see around 5 to 10% of the purchase price in savings, but this is still a lot of money for many people to save. Savings will be considered only when they have been gathered over a period of at least 3 months.
Find out what your monthly repayments might look like.
In case you haven’t been able to save your target deposit amount, here’s a list of alternative solutions that you might feel comfortable considering:
Buying your first home and saving for a deposit will always be challenging. If you’re able to, consider the First Home Buyers Grant, which is accessible in every state, with differing requirements.
Find out how much you could borrow with our calculator.
Need more help and advice? Talk to our Home Loan Specialists today for more information on home loans and let us help you buy your dream home.
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