How much deposit do you need for a Mount Isa home loan
One of the biggest financial goals for many Australians is buying a home. For almost everyone, buying your first property means taking out a home loan. The first step is saving for a deposit. Read on to find out how much deposit you need to buy a Mt Isa home.
The more money you can put down as a deposit, the better your chances of getting approved for a home loan with lower interest rates and fees.
Most lenders prefer home loan borrowers to have a deposit of at least 20% of the value of the property they want to buy. A 20% deposit reduces the risk for the lender and can help you to avoid paying thousands of dollars in lenders’ mortgage insurance (LMI).
So if you wanted to buy a Mount Isa property worth $400,000, you’d need a deposit of $80,000 to hit 20%.
However, a 20% deposit isn’t always feasible for everyone. There are other options available if you don’t have a large deposit saved up.
Firstly, some lenders may offer what’s known as a “low deposit” or even a “no deposit” home loan. They allow you to buy a property with a smaller deposit or no deposit at all. However, these types of loans are likely to come with higher interest rates and other fees.
An option to consider if you‘re a first home buyer is the government’s First Home Guarantee scheme. It helps first-home buyers to purchase a property with a deposit as low as 5% of the property’s value without needing to pay for the cost of LMI.
So if you are eligible for this scheme, you could buy a $400,000 Mount Isa property with a deposit of as little as $20,000.
If you’re a first home buyer building a brand new home, you may also be eligible for the first home owners’ grant of $15,000. You can use this grant to help with your deposit for a Mt Isa home loan.
Other home buying costs
It’s important to remember that the deposit is only one part of the home-buying process. Other costs that need to be considered include:
- legal fees
- building/pest inspection costs
- upfront lender’s fees
- stamp duty (if you’re not a first home buyer).
As a general rule of thumb, you may need up to 10% of the property’s value for these costs (but you would be at the lower end of the scale if you’re a first home buyer).
The bottom line
Overall, the amount of deposit you need for a home loan in Australia can vary depending on a range of factors, including the lender’s policies and your individual financial circumstances.
While a larger deposit can help to reduce the amount of interest you pay over the life of your home loan, there are also options available for those who may not have a large deposit saved up.
It’s a good idea to do your research and speak to a qualified mortgage broker or financial advisor to determine the best approach for your individual situation.
If you’re thinking about buying, selling, renting or leasing any Mt Isa property, or you need your property professionally managed, then contact our team today for an obligation-free chat!
We’d be happy to provide you with advice and to answer any property questions you have.