How much of a deposit do I really need?
Nowadays, lending criteria from banks is stricter, and most lenders are generally willing to finance up to 95% (LVR) of a property’s value inclusive of any mortgage insurance (LMI) payable.
As a rule, we recommend our clients save 10% of the property’s value, as this will allow for the 5% deposit required, mortgage insurance payable and any associated purchasing fees payable (stamp duty etc.).
However, the recommended 10% can vary if you are looking to purchase an investment property and/or if your purchase is eligible for the First Home Owners Grant (FHOG). Ultimately, the bigger your deposit the more likely you are to obtain a favorable decision from the lender.