Print

Getting a deposit together

If you're serious about buying a property, then you can be serious about slashing other expenses like overseas holidays and cars for a while. Because when it comes to buying a home, size matters. The bigger your deposit, the less you'll need to borrow. If you have relatives who can help, you'll have your keys much faster. Some products are specially designed to allow your parents to help you get your first home or apartment sooner. However, if you're not cashed up and you doubt you're about to win the lotto anytime soon, there are still other ways to home ownership…

Saving for your deposit
Saving for a deposit for your home may look scarily hard, but plenty of other people have managed. You should aim to beg, borrow or save between 3% and 10% of the purchase price to put down as a deposit. (Any deposit smaller than 20% and you'll also be required to take out mortgage insurance - another cost to keep in mind!) So, to save a decent deposit you need to budget. In three simple steps our online Budget Planner Calculator can show you how.

First Home Owner Grant
In recent years, first home buyers have been entitled to a $7,000 windfall. It applies to places bought for under $500,000 and it's called the Commonwealth Government First Home Owner Grant. Find out more about eligibility at http://www.firsthome.gov.au

How much can you borrow?
It all depends on:

To get a better idea, go to our How Much Can I Borrow Calculator.

Did you know?
The amount of your home loan repayments, including all your other monthly commitments, should not exceed 40% of your gross income. Let's say you earn $3,000 a month, ($36,000 a year). Your monthly commitments, including repaying your home loan, shouldn't be more than $1,200. That's 40% of your monthly income.

^ Top

Ten steps to homeownership

  1. Research the market. Get to know the local area, check property listings and go to lots of property viewings and auctions.
  2. Do the figures. Work out what you can afford. Our Home Loan Calculator makes it easy.
  3. Get your finance in place. Having your loan approved will put your mind at rest and it'll show any prospective seller you're serious.
  4. Make an offer and negotiate a price. If you've done your homework you'll know what the place is worth, so bargain hard.
  5. Arrange conveyancing. That's legal speak for the transfer of the property from the seller to you. Your solicitor does all this for you.
  6. Have the property inspected. Check the place isn't about to fall down with a property inspection, and get the pest guys in for a good poke about too.
  7. Exchange contracts. Once your solicitor is happy with all the paperwork and searches, you and the vendor each sign a contract and the solicitors exchange them.
  8. Pay the deposit. If you buy at auction it's 10% of the purchase price there and then. If you're buying by private treaty you can pay a holding deposit to get the sellers to take the property off the market, but it's not legally binding.
  9. Arrange insurance. You'll have to arrange for home buildings insurance (which covers you should the building fall down, among other things) as part of the home loan process. Contents insurance is optional but important, and it's often cheaper to take out both options at once.
  10. Settle! No, this doesn't mean you try not to leap around due to all the excitement. This is when you, the buyer, pay the balance of the property's purchase price (or the mortgage kicks off) and you take ownership.

^ Top

The costs of buying a property

Stamp Duty
Stamp Duty is a government tax that you pay when you buy property, and it'll probably be the single biggest expense other than your loan. Also Stamp Duty varies between states and territories, so unless you're a millionaire, it's usually easiest to add this cost to your mortgage.

Other costs
It feels a bit like open-wallet season when you buy a place. On top of the purchase price of the property there are lots of additional costs that you need to budget for, such as inspection fees, solicitor's fees and loan set-up costs. Our Purchasing Costs Calculator can give you a better idea.

Can you afford the monthly repayments?
There's lots to consider, such as other financial commitments including credit card repayments and other monthly expenses. It's nice to own your own place, but it's also nice to still have a life. The Home Loan Calculator can help you do your sums.

^ Top

Links for buyers

^ Top