Buying a home, through a loan in Australia has now become easier, even in the prime locations and cities of the continent. Cost of purchasing a home in main Australian cities such as Melbourne, Sydney, Brisbane, Canberra, and Perth have decreased since the beginning of 2019 up to March of this year. It is still tough to save up for the deposit, most especially when purchasing a home in the main cities. But, you can still purchase a home without having to worry about a hefty deposit through a 95% LVR Home Loan.
Which Banks in Australia Offers 95% Mortgages?
There is a long list of banks that offers 95% LVR for home loans around Australia. You can take out a home loan with as little as 5% deposit, especially with a good credit history under your belt. Some of the top banks that offers 95% mortgages includes Westpac, NAB, ANZ, ING, Commonwealth Bank, Suncorp Bank, Bendigo & Adelaide Bank, Macquarie Bank, ME Bank and Bank of Queensland.
Other banks that offers a 5% deposit home loan are the following – Auswide Bank, Bank of Melbourne, BankSA, Bankwest, Bank Australia, Gateway Bank, Greater Bank, Heritage Bank, MyState Bank, IMB Bank, P&N Bank, St George Bank, Qudos Bank, Regional Australia Bank and Teachers Mutual Bank.
There are also non-bank lenders that offers 95% LVR home loans to its clients. These are AFM, Aussie, Australian Financial, Freedom Lend, iMortgage, Liberty, Kogan Money, Mortgage House, Pepper Money, RAMS, Resi, Resimac, State Custodians, Virgin Money and Yellow Brick Road.
Currently, median priced units in Sydney, Melbourne and Brisbane will cost you $696,935, $466,892 and $372,852 respectively. You will only have to prepare a 5% deposit of $34,847, $23,345 and $18,643 when you qualify for a 95% LVR mortgage.
Average prices of homes in Sydney, Melbourne and Brisbane is at $1,027,962, $809,468 and $563,666 respectively. You will need to prepare a minimum of $29,0000 up to $53,000 to save enough deposit for properties in these said areas.
But wait, there’s more!
Saving for 5% of the value of your property is not enough to proceed with your home purchase through a mortgage. There are some fees included in the processing of your loan. In Australia, if you are getting a mortgage with more than 80% LVR, you are required to pay for a Loan Mortgage Insurance or LMI.
This article How to Use an LMI Calculator explains what and how Loan Mortgage Insurance is computed. For a $500,000 property, you will have to put down a 5% deposit and another $15,960 as LMI. This amount is used to protect the lender in the event that the borrower defaults on the mortgage.
Stamp Duty is another addition to the items you should include in your expenses. State tax varies, depending on what state your property is located. You may refer to this article Stamp Duty Calculator for 2019 to learn more about stamp duties.
Building reports, pest reports and conveyancing may also require you to prepare at least $2,500.
With so many banks ready to help you in your dream of securing a home with a low deposit, the chances of buying your first home this 2019 is possible. Intellichoice can help you narrow your choices. Our mortgage specialists can do the leg work for you and secure the best possible discounts, rates and loan features suited for your circumstance.