How big of a deposit do I need?
In this mortgage minute we look at how big a deposit you need when buying a new home.
So what’s what the minimum? Well, you can get away with 5% in rare circumstances but in most cases 10% is the floor and just like anything size matters!
With the Reserve Bank's loan to value restrictions and banks own lending criteria, the size of your deposit directly impacts how your application is assessed from a servicing perspective, whether there is funding available to lend you at all and also what it will cost you, in terms of interest rates and other fees.
Aiming for 20% makes things easier, with lenders being keen for your business and us being able to negotiate the best rates and other little bonuses like cash back offers. You see lending to you at 20% deposit also frees them up to lend more to clients with smaller deposits at higher rates.
So shoot for 20% but if you can't get there give me and the Loan Market team a buzz on 441 1307 to discuss your options.