Home Loan Rate – Australia

When getting a loan, especially for your first home, you would like it to be as easy on the budget as possible.  This is because if it is a first home purchase, this would mean that you are just starting out, and you may not be as financially capable now as there are a lot of expenses to attend to.  The nice thing about purchasing your first home even on a loan is the fact that the government is more than willing to help out.  First home buyers often get a home owners grant, and discounts on lenders mortgage insurance.

Another thing about purchasing a first home is it would be ideal to pair it with a 90% home loan.  These loans are the most common, and banks and lenders are not that conservative when granting first home buyers a 90% loan.  Of course they require some items such as at least 5% genuine savings, and deposits are normally required especially without LMI premium payments.

Of course whether or not to pay LMI is a personal decision, and not necessarily required when applying for a 90% home loan.  This is particularly true where a deposit has already been made, as LMI is often required only when no deposit, or only a minimal deposit is made.

Those who are financially capable may try for an even larger loan of 95% of the value of the property, in that way they only need to worry about 5% of the purchase price as the 95% in already covered by the loan.

For more information on 90% home loans it would be best to consult the experts on home loans.  They can provide you with the necessary information required on how to get a 90% loan.  They can likewise advise and update you on the benefits and discounts that first home owners get when purchasing their first home.  In this way your dream of owning your own home may finally become a reality.

A no deposit home loan is now available in Australia to assist new home buyers priced out of the market through the difficulty of saving an adequate deposit. The old standard was that you had to save at least 5 percent of the purchase price, plus have more to pay for the other costs like legal fees, Bank, and Government charges.

Not any more. Banks and lenders have come to the aid of these struggling borrowers with a raft of new products including a no deposit home loan.

The no deposit home loan needs to be explained in a little more detail however, before you get too excited. The fact remains that you will probably still have to have some savings, but with the assistance of the First Home Owners Grant, it all becomes much easier.

Let’s take some examples. Say you are looking to buy a home valued at $400,000 or $300000. Now, for borrowers wanting to borrow the maximum 100%, the costs would be as follows. Please bear in mind that Stamp Duties vary from State to State and the following applies to Queensland first home buyers only. All figures are approximate and have been rounded, and not to be interpreted as a binding quote or advice:

Purchase Price $400000

Purchase Stamp Duty $ 2800

Legals (approx) $ 1500

Mortgage Stamp Duty $ 1271

Lenders Mortgage Insurance $ 10545

Government Transfers $ 634

Registration fees $ 112

TOTAL $416862

– OR –

Purchase Price $300000

Purchase Stamp Duty $ NIL

Legals (approx) $ 1500

Mortgage Stamp Duty $ 860

Lenders Mortgage Insurance $ 6126

Government Transfers $ 396

Registration fees $ 112

TOTAL $308994

So, the ‘real’ price you pay for your new $400000 home is actually closer to $416900. So where will your money come from?

The no deposit home loan means the bank will advance you $400,000. The First Home Owners Grant will give you $7000 which means you will have to find about $10,000 of your own money. Some people choose to borrow this from parents, family or as a personal bank loan.

In the case of a $300000 purchase, the figures are different. In this scenario, the ‘real’ cost is $309000. With a no deposit home loan of $300000 and the First Home Owners Grant of $7000, you will only have to save $2000.

After you have taken care of the cash side all that’s left is to satisfy the bank that you can repay the loan and away you go!

Remember that each bank has their own special criteria for assessing loans and you can expect to find wide variance in how much they will lend you. You need access to special software to get the comparisons right, and to make sure you get the loan options you require to suit your personal circumstances.