A big part of the decision to purchase your first home should be based
on your financial status and the impact a home loan will have on your
finances and lifestyle.
You will need to save funds to cover the initial purchase (eg deposit,
legal costs and stamp duty), and then you will have the ongoing loan
repayments to meet. The
Home Loan Fee Calculator
can help you estimate these costs.
One of the best ways to save is to have a goal. The greater the
deposit you can accumulate now, the more purchasing power you will
have. Remember, you will need to think about additional costs such
as stamp duty and legal costs. Generally speaking, a 10% deposit
plus government charges (usually 5%) is the normal amount people save.
Use the
Savings Goal Calculator
to determine how much you need to put aside in order to reach your
savings goal.
Use the
Savings Over Time Calculator
to work out how much you can save by depositing funds at regular intervals.
When you have worked out how much you need to put away in order to
reach your savings goal, you should also establish a budget and stick
to it. Make regular savings from your wages and don't dip into them.
Cut expenses. Save on non-essentials. Never underestimate the power
of cutting costs, no matter how insignificant they seem. Small savings
add up to large amounts over time. See how much you can save by using the
ANZ Budget Planner.
This tool has been specifically designed to help you reach your
savings goal.
Whether you have store cards, credit cards, a personal overdraft, personal
loan or car loan, it is important that you assess your current debt and
implement a plan to reduce it with regular weekly or fortnightly payments.
To ensure you can easily monitor your finances and track your progress,
you may want to have two separate accounts. Use one account for your
bills, repayments and expenses, and the other account for your savings.
Consider opening a savings account that cannot be easily accessed
(for example your funds can't be accessed via ATMs and EFTPOS). This
option is available on the ANZ Progress Saver account,
this will ensure that you are not tempted to ‘dip' into your savings.
With an
ANZ Progress Saver account
you simply make one deposit of just $10 or more and make no withdrawals
in the same month and you'll earn 3% p.a. bonus interest that month.
You will also be eligible for a discount on your ANZ Home Loan or ANZ
Residential Investment Loan and a discounted Loan Application Fee.
Lenders Mortgage Insurance (LMI) is one of the easiest ways to achieve the dream of home ownership sooner for borrowers who do not have a large deposit.
Many lenders will generally only lend up to a loan to value ratio of around 80%. This means that borrowers need a deposit of at least 20% of a property's assessed value.
With LMI, ANZ can lend above its usual loan to valuation ratios for home loans. This means borrowers can buy with a lower deposit and fast track their entry into the home market, and you may only need a deposit of as little as 5% of the property's value, allowing you to purchase your home sooner.
The table below compares paying an LMI fee - which can be added to your loan - against saving a 20% deposit.
|
| $10,000 |
$40,000 |
| $15,000 |
$60,000 |
| $20,000 |
$80,000 |
| $25,000 |
$100,000 |
| 5% |
20% |
* Based on a loan at 95% loan to valuation ratio. These figures will change if a customer is approved for a lower loan to valuation ratio. The minimum deposit shown does not include the LMI fee
LMI is insurance that will cover ANZ if it suffers a loss when a borrower defaults and there is a shortfall following the sale of the security property. .
LMI is available to buyers of established homes, those building homes and residential property investors (established or to be constructed).
LMI is a one-off fee payable by you. The fee amount depends on several variables including the size of your loan, the loan type, and the level of deposit or equity in the property. The fee can be paid from your own funds at settlement, or can be capitalised and added to your loan.
In some cases where you are purchasing an investment property the LMI fee may be tax deductible - see your financial advisor for more details.
To find out more visit Costs of buying your home and click on the Home Loan Fee Calculator
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