How does a home loan deposit work?


Saving up for a home loan deposit can be one of the most difficult and challenging things to do in the home-buying process.

So knowing how much deposit you will need should be an important thing to consider when buying a house.

How much do I need for a deposit?

If you’re choosing your first home loan, you will know that one of the most important questions that the bank will ask you is how much money you have saved for a deposit.

Traditionally, to secure your first home loan you are required to have a deposit of at least 10% of the purchase price of the property.

These days, depending on the lender, you can get a home loan with a deposit ranging from 5% to 20%. The lender will take into consideration other factors too, such as how much you earn, how good your credit rating is, and your track record of saving.

One of the most important questions that the bank will ask you

Don’t have a deposit?

Don’t worry – even if you don’t have a deposit, you still may be able to get a home loan with the help of a family guarantee1.

How much deposit you have counts

The amount that you can save for your deposit demonstrates your ability to pay for a home loan, so the larger the deposit you can put down, the stronger your application will be.

This is why it pays to have a good-sized deposit. A larger deposit will often mean securing better home loan rates and may mean you don’t have to pay Lenders Mortgage Insurance (LMI).

Lenders Mortgage Insurance

If you have a deposit of less than 20% of the purchase price of the property, some lenders will require you to obtain LMI.

LMI protects the lender against any losses they may encounter if you default on your loan repayments.

Speak to Macquarie

Speak to your dedicated Macquarie mortgage specialist to find out how much deposit you’ll need to get the house that you want, today. Call 13 62 27.

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Unless stated otherwise, this information has been prepared by Macquarie Bank Limited ABN 46 008 583 542 AFSL and Australian Credit Licence 237502 and does not take into account your objectives, financial situation or needs. You should consider whether it is appropriate for you. All applications are subject to Macquarie's standard credit approval criteria.