How Much Deposit Do I Need to Buy My First Home?

How Much Deposit Do I Need to Buy My First Home?

Trying to break into the property market but don’t have a clue about how much you need to get started? This is a hard area to navigate because it depends when you are planning on getting into the market and what property takes your fancy. Also consider whether you will have mortgage insurance or not. If you are opting out of insurance you’ll need to have a bigger deposit.

The standard advice for 2017 is that you need 5% of your purchase price as a minimum but 20% is ideal.

Here is an example of how much money you will need to come up with to get your foot in the door:

Price of house & land 5% deposit 10% deposit 20% deposit
$300,000 $15,000 $30,000 $60,000
$350,000 $17,500 $35,000 $70,000
$400,000 $20,000 $40,000 $80,000
$450,000 $22,500 $45,000 $90,000
$500,000 $25,000 $50,000 $100,000
$550,000 $27,500 $55,000  

Note: If you have less than 20% you will likely need mortgage insurance which allows you to borrow more than 80% of the price of your house and land. The more you save the less you pay in things like interest and insurance so get to it!

Here are some little saving tips to get you on your way.

  1. Cut back on overzealous spending
    Try taking a packed lunch to work instead of buying it each day. Ditch those memberships and subscriptions you don’t use. All the little things can quickly add up so scale back all those luxuries down to a few ‘must haves’.
  2. Pick up some extra work
    Second jobs sound like hard work but a lot of the time you can find casual flexible positions that don’t take up too much time but give you some extra money to put aside.
  3. Sell what you don’t need
    Most people get new things and either through their old things out or put them into storage. Try selling your old items. One persons junk is another person’s treasure!
  4. Budget your income
    There is no point doing all these things if you don’t budget your money. Have a detailed budget that makes allowances for emergencies and stick to it!

In conjunction with our Finance Partner, The Loan Company, Impressions the Home Builder can guide you through the finance processes. Contact us today to find out more.

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