How much deposit will I need for my Perth home loan?
When it comes to buying a property, saving for the deposit is a major concern for many people. As a general guide, expect to pay between 10 and 20 per cent of the property price. Some lenders may allow you to pay as little as 5 per cent.
Therefore, on a property valued at $200,000, you would expect to pay between $10,000 and $40,000 as a deposit. To find out more about a Perth home loan, contact a local mortgage broker.
Why pay a deposit?
Many lenders will be more favourable to borrowers who can pay a deposit. By paying a deposit, you can reduce your monthly repayments over the life of the loan.
There are 100% mortgages available, and if you are struggling to come up with the deposit money, then you may want to consider this type of loan. But be aware that taking out a 100% home loan requires you to pay lenders mortgage insurance, which can be costly, and you will still be required to pay for all the legal costs, inspection costs and stamp duty.
Also, your repayments will be higher as you pay a great amount of interest on the loan.
You may not need to pay a deposit if you are looking to buy a second home, and have enough equity in your current home, as many lenders will consider the equity as a deposit.
When budgeting for your deposit, also consider all the other costs you will have to pay as part of the home buying process, such as lender's fees, stamp duty, legal costs and inspection costs.
Owning your own home is a wonderful achievement for many people, so don't let the thought of a deposit discourage you. Perth has many property opportunities, so contact Your Local Finance Broker on  .
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