What deposit do I need to buy a home?
Standard Deposit Requirements
Generally, banks require a 20% deposit (20% of the purchase price of your home), plus you’ll need extra funds for associated purchase costs; like stamp duty & other fees. But what if you don’t have a 20% deposit?
Alternative Deposit Options
Low Deposit Options: Eligible home buyers, single parents or single legal guardians can purchase a property with as little as a 5% deposit (or 2% deposit for eligible single parents/legal guardians under the Family Home Guarantee). This option is also available for home buyers who haven’t owned a property in the last 10 years.
Professional Discounts: If you’re a lawyer, accountant, medical professional, veterinarian, or other professional, you may qualify for LMI waivers, which vary between lenders.
Lenders Mortgage Insurance (LMI): If not eligible for these programs, you can still buy with a 2%-10% deposit, though LMI will apply.
Guarantor Options: Consider purchasing with little to no deposit if a family member with property equity is willing to become a guarantor.
First Home Buyer (FHB) Entitlements
For first home buyers (FHB) understanding your entitlements is crucial. Government incentives vary by state, including stamp duty concessions, land tax options, grants, and schemes. But what are these?
Grants: Usually available on never lived in, or newly built properties. The government gives a ‘cash’ grant to assist with your purchase.
Concessions: ‘Discounts’ on upfront purchase costs such as stamp duty, reducing the upfront deposit you need to buy your home.
Schemes: Unlike the above options, no cash or discounts are provided, however these are designed to help you enter the property market sooner with a low deposit. Refer to the National Schemes for more information below.
National Schemes
First Home Super Saver Scheme: A helpful way to save for your home & reduce the tax you pay on these funds.
First Home Guarantee Scheme: This scheme is also available for those who haven’t owned a property in the past 10 years, or single parents/legal guardians of at-least one dependent, as well as first home buyers. The government ‘guarantee’ your loan, allowing you to buy your home with a smaller deposit & less upfront fees. (This one is my personal favourite!)
State-Specific Information
Refer to your relevant FHB websites for more details:
Queensland (QLD): First Home Owners Grant, Stamp Duty Concessions.
New South Wales (NSW): First Home Owners Grant, Stamp Duty Concession.
Victoria (VIC): Help for First Home Buyers
Western Australia (WA): First Home Owners Grant, Stamp Duty Concessions.
Tasmania (TAS): Help for First Home Buyers
Northern Territory (NT): First Home Owners Grant, Stamp Duty Concessions, Low Deposit Loans through HomeBuild Access
South Australia (SA): Help for First Home Buyers
Book an Appointment with Your Broker
Schedule an appointment with your broker (that’s us!) to determine your eligibility and deposit requirements.
We’ll calculate how much you can borrow based on your budget, income, and expenses.
Remember, it's never too soon to engage your broker.
We’re here to help you from the beginning, and our appointments are complimentary!
Your broker,
Tara
