How much deposit do you need?

How much deposit

Property Loan requirement

Property Loan can be one of the biggest debts that you will ever own. And for this very reason, banks always pay attention to your savings and patterns of savings over time.

Ideally, you would require 20% of the purchase price as a deposit. Your Bank would then arrange the remaining 80% of the funding. If this is not possible, you can get away with a 10% deposit as well. In some exceptional circumstances, banks can accept a 5% deposit. However, your application needs to be very strong to have a high chance of approval with a 5% deposit.

Saving for your first home is a rewarding experience, but it also comes with several challenges. With the increased living expenses, you may even need to adjust your lifestyle in the process of saving. However, you can make this possible with a clear focus and goal-oriented budgeting in place.

It is not only the saving that matters. The lenders also want to see the pattern and the source of this saving.

What other lenders seek

Most of the lenders want to see your genuine saving habit to make sure that the saving is coming from your salary and regular saving pattern, not from the one-off lump-sum payment. This can be demonstrated by 5% deposit being held in one of the following manners:

  • Funds in a bank account
  • Term Deposit
  • Shares

It can also be accumulated saving over a minimum of the 3-month period, or bonus/tax refund received and held in the account for the past 3 months.

Other sources of acceptable genuine savings are:

  • Equity in an existing property, if you have one already
  • Funds from First Home Super Saver Scheme (FHSSS) evidenced by ATO Request Release confirmation

While we all know the importance of saving, there might occur situations where the transactions are not in order as we expect. If we do not have this satisfactory saving pattern, then you need to talk to experienced credit advisors and explain why this occurred. After careful investigation of your case, the credit advisor or mortgage broker like us can suggest some mitigation plans or notes on the file so that you have a higher chance of finance approval.

Do you want to discuss your saving status and deposit plan to become a homeowner? Please REQUEST a call back from one of our experienced mortgage brokers.



Kiran Thapa

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