First home buyers low deposit

Posted on: 23.05.2017

Low deposit required for First Home Buyers

Did you know that from the 1^st of July 2016 until the 30^th of June 2017 the QLD Government has boosted the grant for new homes by an additional $5,000, which will now be worth a total of $20,000!

What does this mean for you as a first home buyer with a low deposit?

Whilst a large amount of lenders would like you to save a 5% deposit yourself over time, some lenders are now accepting that you are paying rent, and will use the $20,000 First Home Owners Grant as your 5% deposit. 9 out of 10 times you still need to have some savings of your own to pay for things like conveyancing, bank application fees and Government charges, however, this makes it an easier goal for you to achieve.

Below is an example of how it works, and the approximate costs involved:

Purchase price: $400,000

Stamp duty on property: $0

Transfer fee: $868

Registration of mortgage: $175

Bank application fees: $500

Lenders Mortgage Insurance (LMI): $11,000 (does vary from lender to lender)

Provision for Conveyancing: $1500

Total cost of property: $414,043

Base loan amount: $377,000

Loan amount including LMI: $388,000

Funds required to contribute: $26,043 ($414,043 – $388,000)

$26,043 minus the $20,000 First Home Owners Grant = $6,043.

So in this circumstance, to cover all costs you would need to have total savings of $6,043 to purchase a new property worth $400,000.

• Note that figures will change slightly depending on the lender, so whilst we try to keep the information as accurate as possible, we cannot guarantee that this information will be applicable to your situation, we highly recommend contacting our office for an obligation free finance chat.

Keep in mind that you’re only eligible for the First Home Buyers Grant of $20,000 if you purchase a brand new property that has never been lived in, or you elect to buy land and build your own.

To find out more, please don’t hesitate to contact us