How much money do I need for a deposit?

How much money do I need for a deposit?

If you’re in the market for a property, you need to know how much to save for a deposit. Today, we’re delving into what you need to know, so you can budget and prepare yourself to achieve your property goals.

How much do I need for a deposit?

  • According to a home loan deposit is typically 20% of the agreed sale price.
  • As an investor, you generally have to pay more, so be prepared to pay as much as 30% of the property price.
  • The percentages listed above are minimum deposit amounts.
  • If a 20% deposit cannot be made, 10% or more is the recommended minimum.
  • The higher the deposit amount, the less you will pay over the life of your home loan. (So ideally, a higher deposit is better.)
  • The minimum deposit amount between lenders will vary, so check with your mortgage broker if you’re unsure. 

What if my deposit is less than 20%?

Most lenders require borrowers to take out Lenders Mortgage Insurance if their deposit is under 20% of the agreed sale amount.

Some people do not realise that Lenders Mortgage Insurance exists to protect the lender, rather than you, should you default on a repayment.

This means that if you do default on a mortgage repayment, the lender is covered by the insurance you have purchased.

For more on Lenders Mortgage Insurance, head here.

How do I work out what my deposit should be?

The simplest way to determine your deposit amount is to use a Home Loan Deposit calculator.

This calculator works out what you will need to pay, based on a number of factors. For example:

  • If you are an owner-occupier.
  • If you’re purchasing your first property.
  • The total amount of your assets.

Using the information provided by the calculator, you’ll be to get a clearer understanding of where you are on your savings journey.

Capita has a number of Finance Calculators, which you can use as a guide for your home loan needs.

Saving for your home loan deposit offers valuable information about saving for a deposit. Here are some points that will help you stay positive and on track:

  • Develop a realistic savings plan and do your best to stick with it. Eventually, you’ll see your savings grow to the amount you need.
  • If you’re unsure of how to develop a savings plan, speak with a professional Financial Advisor or a Financial Planner for support.
  • These days, lenders are more creative about how they calculate deposit amounts. 
  • For example, if you live in a home, monthly rent expenses may be considered part of the home loan deposit. (If paid regularly and on time.)
  • A deposit isn’t only about the lender getting funds up front. The lender also wants to know you’re disciplined enough to make timely repayments.
  • If you have a savings plan that works, and pay rent in full and on time, this shows the lender you are more likely to be able to regularly pay off your mortgage.
  • For more information on home loan deposits, head here.

Saving for a home?

Contact us about securing a home loan that matches your goals and saves you more. We’ll work out what your minimum deposit amount should be, and connect you with a lender that fits you and your circumstances. 

We have hundreds of loan products at our fingertips, which we can compare for you. And, this home loan service is free of charge, as the lender you end up choosing pays your broker a commission when the loan has settled.

Get started now.


Financial Advice Disclaimer: This information is general in nature. Mortgage brokers do not provide financial advice. Clients seeking financial advice will be referred to a qualified financial planner.