Q: How much do I need to save for a first home owners loan?
- Deposit Requirements
In Australia, first home buyers are generally required to save a deposit of at least 5% of the property’s purchase price to qualify for a first home owners loan. However, some lenders may require a higher deposit, such as 10% or more, to reduce their risk and ensure that borrowers can afford the loan repayments.
- Property Prices
The amount you need to save for a deposit also depends on the property’s purchase price. In some cities and suburbs, property prices are higher than others, which can affect your ability to save a deposit. It’s essential to research the property market and consider different suburbs and types of properties to find a home that suits your budget and financial circumstances.
- Government Grants
The Australian government offers various grants and concessions to help first home buyers enter the property market. The most popular is the First Home Owners Grant (FHOG), which provides a one-off payment to eligible first home buyers. The FHOG amount and eligibility criteria vary by state and territory, but it can help reduce the amount you need to save for a deposit.
- Lender Requirements
Each lender has its requirements for home loan applications, including deposit requirements. It’s essential to research and compare different lenders to find one that suits your financial circumstances and offers favorable loan terms, including low deposit requirements.
- Savings Strategies
There are several savings strategies that you can use to help you save for a first home owners loan. These include setting a budget and tracking your expenses, reducing unnecessary spending, increasing your income through a side hustle or part-time job, and taking advantage of high-interest savings accounts.