How Much Deposit Do You Need To Buy A Home In Western Australia

How Much Deposit Do I Need To Buy A Home?

This is a question a receive all the time,  How much deposit do I need to purchase a home. There are many options, and all banks and lenders have different policies, but we will look at 2 options, 5% deposit and using a guarantor for your home loan ( this option may require no deposit). We will also look at the difference required as a first home buyer in Western Australia, and someone who has purchased an owner occupied property previously.

5% Deposit

This is generally the minimum deposit you will need. The deposit is 5% of the purchase price of the property. For example, if the property you would like to purchase costs $100,000, you would need a minimum of $5,000 deposit (5%).

You will also need to enough funds to pay for fees like stamp duty, settlement agent fees and other costs associated with purchasing a property. This is required additional to your deposit.

For example if you were buying a home for $300,000 in Western Australia and you are not a first home buyer, you would need –

$15,000 Deposit (5% of $300,000)

$8,835 Transfer stamp duty

$1,500 Settlement agent fee  (an approx cost)

$2,000 Payment for the balance of the shire and water rates (an approx cost)

$500    For a termite and or building inspection (an approx cost)

You would need, if you are not a first home buyer, approx $27,835 deposit to buy a home costing $300,000.

If you are a first home buyer purchasing a home for $300,000 you would need –

$15,000 Deposit (5% of $300,000)

$0 Transfer stamp duty (first home buyers in Western Australia pay no stamp duty for a property costing up to $500,000)

$1,500 Settlement agent fee  (an approx cost)

$2,000 Payment for the balance of the shire and water rates (an approx cost)

$500    For a termite and or building inspection (an approx cost)

You would also get the first home buyers grant of $7,000, which would help reduce the cost of those fees.

To buy a $300,000 property as a first home buyer, you would need approx $12,000 deposit, although some banks or lender will still require the $15,000 deposit.

Whether you’re a first home buyer or not, you will pay a once off mortgage insurance fee too. This is when you borrow more than 80% of the property value. This lenders mortgage insurance fee, depending on the bank or lenders policy, may be able to be added to the home loan. It is important to speak to a mortgage broker, and learn what options are available to you, and maybe consider pre approved mortgage finance.

Using A Guarantor For Your Home Loan.

When using a guarantor for your home loan, you may not need a deposit at all. Using a guarantor is generally available to both first home buyers and non first home buyers. Not all banks or lender do guarantor home loans, but quite a few do.

When using a guarantor for your mortgage, you may be able to borrow 100% of the purchase price of the property you are interested in, plus the associated fees like stamp duty etc. The guarantor will generally need enough equity in there property to support the loan you are considering.

There is a good article on Using a guarantor for your home loan, have a read it gives some advantages and disadvantages of using a guarantor for your home loan.

There are many different rules and policies with each bank or lender when considering how to purchase your home. These options may not be available to everyone, so it is important to seek information from a mortgage broker to learn what options are available to you, and maybe consider pre approved mortgage finance.

If you have any comments or questions, please leave below. If you would like some more personal finance information, or would like to use my service as a Perth metro mortgage broker, please contact me anytime.