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Three Things To Help You Secure A House Deposit

Are you saving for a house deposit? Have you been dreaming of buying your first home? Purchasing property is exciting but with house prices consistently going up, getting on the property ladder can be daunting. Saving up for a home deposit takes a lot of hard work.

However, you may not need to save up as much as you first thought. There are options available even if saving the usual 20 per cent deposit seems unreachable. With support to secure your loan, the dream of home ownership may be closer than you think.

We take a look at some ways that you may be able to get help when purchasing property.

Lenders Mortgage Insurance

Typically, 20 per cent of the purchase price of the house is required to secure a mortgage. You also need to factor in the costs of buying a house, like stamp duty and building inspections, which can really increase the amount you need to save before even looking at properties.

However, it can be possible to buy a home with a smaller deposit than 20 per cent. Some lenders will accept as little as 5 per cent of the property price if you are willing to pay lenders mortgage insurance (LMI).

Lenders mortgage insurance is designed to protect the lender if for some reason you can’t pay your mortgage repayments. It is a one-time payment made by the property buyer which allows you to borrow more than 80% of the property purchase price. If you are willing to pay this extra sum, a deposit might be closer than you think.


If you want to avoid paying mortgage insurance, you may want to consider asking someone to be a guarantor for you. A guarantor is someone who signs a guarantee on behalf of a borrower when they apply for a loan. This means that they are legally responsible for paying back the lender if the borrower defaults on the loan.

Under normal circumstances, the guarantor will not contribute anything to mortgage repayments. They only step in if you fail to pay your mortgage.

Being a guarantor for someone is a financial risk. Normally, guarantors are family members, such as your parents. Even if you think you are always going to be able to make your mortgage repayments, sometimes things go wrong – so don’t underestimate the risk that your guarantor is taking on your behalf!

Government Schemes

If you’re buying your first home, you may be eligible to receive assistance from the government. The First Home Owner Grant is a scheme that helps people buy property. The grant differs between states, but it could offer up to $20,000 towards your first home, or reduce how much you need to pay in stamp duty.

The First Home Super Save Scheme is another option for first home buyers. This allows you to save a deposit through your superannuation and withdraw it when you are ready to buy your first home. You can make up to $15,000 of voluntary super contributions a year, which can be extra helpful for people who struggle to save.

When you’re thinking about buying property make sure you look into the latest government grants and opportunities and take advantage of any assistance.

Sally Writes 07 Jul 2021