How Much do I Need to Save as a Deposit to Buy a Home?
It used to be relatively easy to get the mortgage that you needed. It was even possible to benefit from 105% home loans in rare cases. If you needed a 100% loan then you could find one if you took the time to shop around. These days however, it is very rare to find a lender who will offer you anywhere near 100% mortgage.
If you are looking to buy your own home then you will need to think about a deposit. Since the GFC banks are no longer giving out loans to just anybody. All banks and lenders have made it more difficult to be accepted for a home loan. This is mainly thanks to the recession.
However, it’s the loan ratio which is hurting first time buyers. If you are looking to find out how much you need to save for a deposit on a mortgage, you will still need to compare different lenders.
Featured First Home Buyers Home Loan
Illawarra Home Loans Bank Beater 95% Plus Home Loan is a great option for your first home or your first investment property. Borrow up to 95% of the property value plus you have the option to add the LMI onto the loan. A 100% offset arrangement is also available. When you complete the enquiry you will speak directly with a mortgage consultant.
- Interest Rate of 6.26%
- Comparison Rate of 6.28%
- Application Fee of $0
- Maximum LVR With LMI: 95%
- Minimum Borrowing: $100,000
- Maximum Borrowing: $750,000
What is the Maximum Loan Amount You Can Borrow?
When you shop around you will find that the maximum you can typically borrow from banks these days is up to 95%.
However, it will depend upon your circumstances the loan ratio you are actually offered. Use one of calculators to help you determine how much you can borrow.
In order to benefit from a 95% mortgage, you will need to be full time employed and have a strong employment history. You will also need to prove that you have some savings. How much you are looking to borrow overall will ultimately help the lender to decide how much to lend you.
If you want to look at other lenders rather than just banks, you may even find deals up to 97%. RAMS is one of the companies currently offering 97% mortgages. This however tends to include Lenders Mortgage Insurance. When you take off the insurance the amount you are actually borrowing is 95%.
If you are lucky enough to find mortgage deals for 95% and over then it would be worth snapping them up. You would then only need a small deposit. A good example of this would be if you were set to buy a house which cost $400,000. A 95% loan would enable you to borrow $380,000. That would leave you needing a deposit of $20,000.
One thing to remember is that the lower the house value, the lower your repayments will be and the more chance you will have of getting accepted for the mortgage.
How Long Will it Take You to Save up?
If you plan on saving towards a deposit then it can take up to five years depending upon how much you can save each month. Will you need to save the money out of your monthly salary or will you have access to a lump sum of money?
When you are looking at a mortgage with a ratio of less than 80%, on average it is shown to take 4 and a half years to save up the deposit needed.
To improve your chances of getting the mortgage that you need, make sure that your credit history is clear and you have a strong employment background. You will also need a secure and stable income.
Overall these days you will need a deposit to secure the home that you want. Most banks and other lenders will no longer offer 100% mortgages. However if you take the time to shop around you can find deals up to 97%. Make sure that you also have no other debts before you apply. Following this advice will enhance your chances of getting a mortgage.
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- No Deposit Home Loan – An Option For First Home Buyers
- Home Loan Deposit Calculator
- Collins Securities First Home Buyer Low Deposit
- No Deposit Home Loans
- eChoice No Deposit Home Loans
- How Much Deposit Do I Need?
- No Deposit Investment Loan
- Save for Your Deposit with the Virgin Saver Account
- What Percentage Of The Purchase Price Is Required For A Home Loan Deposit?
Top Home Loans
| Home Loan | Details | Interest Rate (p.a.) | Comp Rate^ (p.a.) | App Fee / Ongoing Fee | Max LVR | Min & Max Borrowing | |
|---|---|---|---|---|---|---|---|
 Loans.com.au - Dream Catcher | A home loan offer with a $0 application fee and one of the lowest available home loan interest rates. | 5.85% | 6.21% | $0 / $375 | 80% | $50,000 / $750,000 |
 
|
 Bankwest Online Home Loan | A low interest rate home loan with a $0 application fee and ongoing maintenance fees. This offer is exclusively available by applying online. | 5.97% | 5.97% | $0 / $0 | 80% | $100,000 / $1,000,000 |
|
 Illawarra Home Loans Bank Beater Home Loan | A low variable rate, beaten down even further by 0.05% p.a. after 5 years. | 6.07% | 6.35% | $0 / $345 | 90% | $250,000 / $1,000,000 |
|
 State Custodians Mortgage Company Standard Variable Offset Loan | Awarded the 2011 Non bank Lender of the Year this feature-packed loan rewards customers with a bonus rate drop of 0.25% after 5 years. | 6.02% | 6.23% | $0 / $345 | 95% | $150,000 / $1,000,000 |
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