Lending Hand Finance - Home Loans ( 95%, 97%, 100% Home Loan Deposit)

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What you need to know about Deposits – A must read!

95% Lend
As a general rule most lenders are happy to lend 95% of the value of land/house/ construction. However this remaining 5% has nothing to do with the fees associated.

Therefore you must in effect have the full 5% deposit to make up the value plus all funds to cover the costs and fees. The majority of these fees can be attributed to mandatory government charges, i.e. stamp duty, registration of title etc.

So for example (in S.A.) if a house costs you $200,000 you will need 5% deposit which is $10,000 plus fees. Fees would be approximately $12,000 in this case.

Therefore total amount payable = $22,000

If you buy in non-metro areas you maybe restricted on the percentage the lender will lend on the value, so you will need to come up with even more.

100% Lend
It is well known that there are lenders that offer 100% loans. Be aware that the LMI (Lender’s Mortgage Insurance - see Lenders Mortgage Insurance – Who Does It Cover? ) is often much higher then normal and because you are already borrowing 100% of the value you will need to pay for that charge out of your own pocket up front.

i.e. Purchase price $200,000
Lender advances $200,000
LMI charge $7000 + fees of $12,000

Therefore total payable = $19,000

That is only $3000 less then the first example, not a lot considering.

97% Lend
Another way in which you can achieve a lesser deposit on your behalf is to find a lender that allows you to ‘add’ the LMI charge onto the mortgage.

There are some that will go to a full 97% of value, and then ‘add’ the LMI onto the loan. You will be borrowing in effect up to 99.9%. The catch is you will need to show them 3% as a deposit, but you can use that towards the actual fees. So again lets look at this example…

i.e. $200,000 value.
Lender advances $194,000, then ‘adds’ LMI as well + $4,000

Therefore total payable = $2000 + fees $12,000 = $14,000

Of course if you are eligible for the FHOG then the amount you will need to come up with will decrease significantly. If you are tight on deposit, you are actually better off going down the path of ‘adding’ the LMI onto the loan.

Talk to Lending Hand Finance about all your deposit questions.

Did You Know?

We can source lenders and loans specific to your needs, whether you're an investor or building your own home, we can lend a hand.

Contact Lending Hand Finance on
1300 850 545 or

Mortgage & Finance Association of Australia

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The Personal Mortgage Brokers at Lending Hand Finance can assist Australians requiring a Home Loan in NSW, VIC, WA, NSW, TAS, SA QLD, ACT, NT, and NZ.