Home Loan Deposit Calculator
It gives the lender an idea of what you can afford to repay regularly
Regular savings deposited into an account over a period of several months, regular rental payments and investments all work together to give lenders an indication of your ability to maintain your home loan repayments.
Lenders will look at these and your income sources (salary, investments, dividends) to assess how much money they’re willing to lend to you. Use our borrowing power calculator to get a rough estimate of how much you may be able to borrow.
It impacts the interest rate lenders may offer
The deposit you have available when you come to apply for your home loan can have an impact on the interest rate of the loan.
The bigger your deposit, the more negotiating power and choice of lenders you may have. If you have a bigger deposit, you may even be able to secure a discounted interest rate from a lender.
It affects how 'risky' you are as a customer, and whether you need to pay Lenders Mortgage Insurance (LMI)
Lenders use a simple Loan to Value Ratio (LVR) calculation to assess how risky they consider you (as a borrower) to be. The loan to value ratio looks at the amount you wish to borrow in relation to the value of the property you're looking to purchase.
The higher this ratio, the more risk for the lender. Generally, if you have an LVR of over 80% (as in you wish to borrow more than 80% of the property's value) the lender will require you to pay an LMI premium. This insures the lender against any losses that may occur in the event you default on your loan.
There are alternatives to paying LMI, such as have a family member act as a security guarantor for your loan.
You pay less interest over the life of your loan
The less money you borrow, the less you have to pay off in the future. This means over the course of the home loan, you’ll also be paying less interest. You stand to save a lot by having a sizeable home loan deposit.
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First Time Homebuyer Programs California
When it comes to saving for a home deposit, you’ll often hear people bring up a minimum figure of 20%. In other words, if the purchase price of your home is $500,000, many people will tell you that you need to. What is the First Home Loan Deposit Scheme? The First Home Loan Deposit Scheme began on 1 January 2020. It allows eligible first home buyers to purchase a property with as little as a five per cent deposit and without the need to take out lenders mortgage insurance (LMI). The First Home Loan Deposit Scheme allows first home buyers with deposits as low as 5% to get a home loan without paying Lenders Mortgage Insurance (LMI) fees. Essentially, the government will act as the mortgage insurer guaranteeing home loans for eligible first home buyers with a minimum deposit of 5% of the property value. You may be able to use a Family Security Guarantee 1 where your parents use available equity (supported by a mortgage over their property, or a term deposit) to assist you with your home purchase. An earnest money deposit is a deposit of good faith on a home loan from a buyer to a seller that serves to protect VA buyers and sellers in a real estate transaction. Skip to Content A VA approved lender.