First Time Buyer Mortgages

[LisaRich]

Hi everyone,

Just wanted some idea of how the first time buyer mortgages work in australia. We will be renting to start with but hope to buy after a few years. We think that our budget would be $350,000 maximum, do banks offer deals with only a 5% deposit??

Hope someone may be able to shed any light on this.

Many thanks

[The Pom Queen]

Yes they do but it would depend on your wage and visa type.
Andrew Williams (a member on here) would be a great person to ask for more info
Kate

[Andrew Williams]

Hi everyone,

Just wanted some idea of how the first time buyer mortgages work in australia. We will be renting to start with but hope to buy after a few years. We think that our budget would be $350,000 maximum, do banks offer deals with only a 5% deposit??

Hope someone may be able to shed any light on this.

Many thanks

Hi LisaRich

Sorry for the delay.

Yes as Kate says there are Banks that will lend to a 5% deposit and it will depend on various factors.

Generally temporary residents are restricted to 80% borrowing so will require 20% deposit.

Permanent residents may be able to borrow up to 95%.

Of course the income will need to be able to service the loan and employment history etc will all be taken into account amongst other things.

Just bear in mind that there will be costs to purchase in addition to the deposit and these can vary from state to state, these could be as much as 5%.

There is also a Lenders Mortgage Insurance (LMI) premium that is generally levied on borrowing of over 80%, this is similar the a High Percentage Loan Fee (HPLF) in the UK.

As an example on a property of $350,000 at 95% borrowing this will be around $10,000!!!!

The LMI may be able to be added to the loan with some lenders.

Permanent residents who are buying in Australia for the first time may be eligible for the First Home Owners Grants (FHOG), Bonus Grants and/or certain concessions but again these can vary from state to state.

Hope this helps,

Regards

Andy

[dustyroad]

So just because you borrow more than 80%, you get stuck with a 10K fee
Wow that is a complete rip off and is a the cost of a half decent car !