How much deposit do I need to buy a property?
how much money does it take to purchase a property?
The amount of money you need for a deposit depends on the lender and their lending criteria. Some lenders let you borrow up to 90% or 95% of your home’s value. So you may only need to save a 5% deposit to have your loan approved.
However, while you’re probably super keen to get into your own home, there are good reasons to aim for a bigger deposit. For one, it means you need to borrow less, and this helps you save with lower regular repayments, and a lower interest cost over the lifetime of the loan.
With a larger deposit you also represent less risk to lenders. So you could be in a better position to negotiate a lower interest rate. If you have less than 20% of the purchase price, your lender will almost certainly require Lenders' Mortgage Insurance (LMI), which is very expensive. LMI protects the lender – not you, if you cannot repay your loan, so it’s a cost worth avoiding if possible.