What Does This Calculator Do ?

This calculator calculates the total accumulation in a savings account with a regular deposit arrangement.

Saving a Deposit to Purchase Property – I Want To Enter The Property Market!

Buying a home or a property may imply a deposit. You may come across home loans that require no deposit at all, but their approval criteria are known to be tough.

Therefore, you are left with only one thing to do – namely, to save a deposit so that you will be able to purchase a home or a property.

Keep in mind that saving for a deposit can take years. You shouldn’t quit after several months if you really want to purchase that property – just embrace financial discipline and start building up your deposit.

Your Deposit Size

Obviously, before you start saving a deposit, you must know how much you should save – or when you should stop saving. Property usually comes with a deposit 0f 20% of the total price.

Some lenders may accept deposits as low as 10% or 5% as well. However, a smaller deposit means that you will have to borrow more money and pay more interest. On top of that, a deposit lower than 20% may require you to pay LMI – Lenders Mortgage Insurance.

For example, a property valued at $500,000 will require you to save a deposit of $100,000 (20%). If you find a lender that accepts a deposit of 10%, you’ll need to save only $50,000 – but the possible LMI and other costs such as stamp duty could bring this sum quite close to $100,000 – get in touch with our office who will be more than happy to answer questions and workshop scenarios with you.

Serious Saving

Naturally, it doesn’t matter what percentage of the property’s price you have to save as deposit. It all boils down to how serious you are about saving money for purchasing a property.

Here is what you should do to optimise saving:

Examine Your Spending ­­

Know exactly how much you spend each month and see whether you could cut some things off or not. Use an app or a written record for this.

Setting a Budget

It is recommended that you set a specific budget for every month’s spending; naturally, this budget should allow you to efficiently save a deposit.

Pay Off Urgent Debts  

Obviously, you should get your debt under control as soon as possible as it will affect your saving power. Take care of high-interest debt first.

Maximise Savings

To maximise your savings, you could also put a part of them in a term deposit or build your property deposit with a high-interest savings account.

Can I Get Deposit Help – What Are My Options

Naturally, spending money and saving less may not always help you as much as you need. You may need the help of other entities or people in order to build up a deposit.

Clearly, the most common deposit help that you can get implies asking your family for help.

Parental Guarantor

Your parents may agree to guarantee for a part of your deposit, thus avoiding LMI and giving you the opportunity to purchase property with a smaller deposit.

Cash Gift

Your parents or relatives can also provide you with a cash gift to empower your deposit. However, keep in mind that there are some rules that you have to respect when relying on this way of deposit help.

Living with Your Parents

There’s not too much to say about this; just imagine saving a deposit without having to worry about rent every month!

First Homeowner Grant

Depending on the state that you live in, you may be eligible for a cash grant for first time home buyers. Obviously, you can use this grant to build up your deposit.

The Bottom Line

Saving a deposit can be quite hard – but remember that this is the first step towards purchasing and then living in your dream home. In short, you should start saving.

But, on top of that, make sure to look into the things that can help you with your deposit as well. If you have any questions or just need more information about deposits, home loans, and so on, feel free to get in touch with us.

We will answer your questions and, if need be, guide you through the process of finding the best possible lender for your needs. Contact us today – we are more than glad to help you!

Calculator Disclaimer

• It does not take into account any possible monthly account fees.
• Interest rate does not change over the saving term.
• Interest is calculated by compounding on the same deposit frequency selected, i.e. weekly, fortnightly, monthly. In practice, interest compounding frequency may not be the same as deposit frequency.
• It is assumed that a year consists 26 fortnights or 52 weeks which is counted as 364 days rather than 365 or 366 days.
• No rounding is done throughout calculation whereas account balance is rounded to at least the nearer cent in practice.

Want to discuss your savings plan to prepare for your next home loan ? Contact us on on 02 9121 6247 or submit your scenario online.