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What if I don't have a 20% deposit?

Updated: Sep 25, 2018

It's difficult to save 20% of the total purchase price, along with continuing to live, rent, save etc.

“You no longer NEED to have 20%.”

The good news is, you no longer NEED to have 20% saved, as their are many lenders out there that will let you borrow up to 95% of your property value.

For example; if you have a buying budget of, say, $400,000, instead of trying to save a 20% deposit of $80,000, you could still secure a home loan with a far more achievable deposit of $20,000. This is the case for owner-occupied properties, not investments. For owner-occupied loans, some lenders let you borrow 95% including lenders mortgage insurance (LMI) and some let you borrow without LMI. 

There is a reason behind the 20% though. If you borrow more than 80% or more of your home’s value, you will be asked to pay lenders mortgage insurance (LMI). You may have heard of this – it’s a type of insurance that protects the lender (not you) if you are unable to keep up the loan repayments.

For more information on your deposit required and funds to purchase, chat to Loan-Savvy, who will be happy to explain the costs to you.

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