For most homebuyers, a 20 per cent deposit is normal, however lenders will look at 10 per cent in certain circumstances.  No deposit home loans are available where you can borrow 100% of the purchase price, but these come with higher interest rates and many lenders are becoming increasingly wary of no deposit home loans.  More and more lenders are pulling this product from the market due to the global financial crisis.

Each lender will vary on how much deposit you will need for first home loans, but between 10% and 20% is the norm.  So for a $250,000 property, you need to have $50,000 for a deposit.  Add together any existing savings you may have, the First homeowner grant and the First home saver accounts and see if this target can be reached.

Some first homebuyers are lucky to have supportive family who generously give some contribution to your deposit. 

However, for many people, saving for a deposit can prove hard, especially if you are already paying rent.  Finding extra money each month to put away is not that easy, but with the new government incentives and the first home buyers grant it is easier for first homebuyers to save a considerable deposit.

First, there is the First home owner grant, which is available for first homebuyers building their first home or buying a newly constructed home.  The First Home Owners Grant was increased in 2008 but is now due to be reduced as of 31 December 2009.  The original first home owners grant of $7,000 is still available to eligible first home buyers after this date. 

The grant was boosted by the Federal Government during the global financial crisis to boost the property market but is now winding back to the original $7,000.  The grant is designed to help first home buyer onto the property ladder.

There is also the First Home Saver Account, which allows first homebuyers to save their funds with tax breaks and government top ups.  For every dollar you save, the government will contribute 17 cents, meaning the amount in your account can creep up very quickly.  Once you have held the account for at least four years and deposited a minimum of $1,000 per year you can access the money for your first home.  

In ideal circumstances you will have a 20% deposit saved for a first time mortgage.  Any less than this and you may have to pay lenders mortgage insurance (LMI). 

If you already have a deposit saved call us today.  Submit your details on line or call .