We explain this in three different scenarios:

Ideal scenario: 20% of property purchase price. This way you don’t need to pay any lender mortgage insurance and you save money here.

Most people do: 10% of property purchase price. You will be paying lender mortgage insurance to the lender and depending on the proposed use (owner occupier or investment), loan size and the state of security, this can be expected around 2% of the property price. You may need to pay this 2% upfront if the lender didn’t allow this insurance amount to be added into the loan.

At least: 5% of the property purchase price. In this situation, your application needs to be very strong (such as stable job, not many credit checks in the recent past, etc) to get approved. Also, the lender mortgage insurance premium jumps significantly from what we estimated above. Most of the lenders don’t allow to add this insurance premium to be added to the loan when you are borrowing 95% already. You would need to come up with extra funds for this as well.

In all the above scenarios, please note that you also need to bring extra money for stamp duty expenses and other closing costs (such as the legal, council, etc), which is another 5% of the property purchase price. Sometimes, you may be eligible for stamp duty concession or even exemption so these costs may vary accordingly. Please contact us to discuss your circumstances.

This is a normal day-to-day transaction account that also has the additional benefit of interest offset. If you have any money in this account, then the interest amount is offset from the home loan account. For example, you have $10,000 in the offset account and home loan balance is $80,000 today, the lender will charge interest on the difference (=$80,000 – $10,000 = $70,000) only. If the account is the everyday offset account, then they calculate the interest on daily differences.

If you need, you can still withdraw funds from offset account by using your debit card and all other functions of everyday banking facility is still there. Most of the offset accounts come usually with the package home loan products.