Complete the Details Described

It’s important to understand each input, because even minor changes can significantly affect your borrowing outcome.

Real Estate Values

This is the agreed purchase price or the valuation accepted by the lender. This is the benchmark for all calculations including LVR and deposit requirements.

Amount of Loan

This is how much you want to borrow. It is decided by:

• Your income and outgo
• Credit check
• Type of property
• Restrictions on lending policy

Amount of Deposit

Your deposit is the difference between the property value and the loan amount. Usually a larger deposit means:

• Less risk for lenders
• Better approval rates
• Lower or no LMI fees

State Selection

Stamp duty rules differ between Australian states. For instance:

• NSW has higher stamp duty on higher-value properties
• First home concessions vary by state
• Some states provide partial exemptions or grants

Initial Purchase Status

First home buyers could get help from:

• Stamp duty reliefs
• First Home Owner Grants (FHOG)
• Lower deposit requirements in some schemes

Use of Property

Lenders view different types of properties differently:

• Principal home = lower risk
• Investment property = higher interest and tighter lending
• Vacant land = larger deposits needed

Property Style

The type of property can influence valuation risk:

• New homes: easier to value
• Existing homes: standard lending
• Vacant land: greater risk for lenders

Non-Resident Buyer Status

Foreign buyers may have to deal with:

• Higher stamp duty charges
• More stringent lending standards
• Higher deposits required

Detailed Results Explained

Property Price

This is still your baseline number. This is the number everything is measured against.

Loan amount final

This is the amount you’re approved to borrow after lender adjustments. The loan you applied for might be different because:

• LMI changes
• Policy reductions
• Risk evaluation

Projected Costs

These are:

• Stamp duty
• Registration fees
• Legal & conveyancing fees
• Lender’s fees
• Mortgage insurance (if any)

Cost Breakdown Example (Simplified)

(Values vary based on state rules and lender policies)

Funds Available

This is your total liquid cash available for:

• Government charges
• Deposit
• Settlement charges

Lenders want:
Available funds ≥ Deposit + additional costs

What is Loan to Value Ratio (LVR)?

One of the most important lending metrics is LVR.

It is calculated as:

Loan / Value of Property × 100

For example:

• Loan: $500,000
• Property: $600,000
• LVR = 83.3%

Why LVR is important:

• 80% → LMI generally applies
• Under 80% → better rates and no insurance
• Lower LVR = lower lender risk

What is Lender’s Mortgage Insurance (LMI)

If you default, LMI protects the lender, not you.

When you usually pay LMI:

• Deposit below 20%
• LVR greater than 80%

Example effect:

• $600k house
• 10% deposit → LMI could be $6,000–$15,000
• 20% deposit → No LMI

The Lowdown on Stamp Duty

Stamp duty varies widely by state and property type.

Factors affecting stamp duty:

• Property value
• State law
• First home buyer benefits
• Residential vs investment use

Example:
A $600,000 home in NSW could attract significantly more duty than the same home in another state with concessions.

Understanding Deposit Scenarios

5% Deposit Scenario

• Higher LVR (~95%)
• High LMI cost
• Easier entry into property market

10% Deposit Scenario

• Moderate LVR (~90%)
• LMI still applies
• Balanced entry point for many buyers

20% Deposit Scenario

• LVR = 80%
• No LMI
• Lower long-term repayment burden

Why Just Your Deposit Won’t Be Enough

Many buyers think all you need is a deposit but in fact:

You also need to plan for:

• Stamp duty
• Conveyancing fees
• Bank application fees
• Inspection reports
• Moving expenses

And that’s why the total upfront cost is always more than just the deposit.

Buy Now or Save Longer?

One of the biggest decisions for deposit savers: buy now with a smaller deposit, or wait and save more?

Buy now with 10% deposit:

• LMI cost: approximately $10,000–$20,000 on a $500k loan
• Enter the market sooner
• Less exposure to rising prices while saving

Save longer for a 20% deposit:

• No LMI cost
• An estimated 12–24 additional months of saving
• Property prices may rise in the meantime

There’s no universal right answer. A broker can help you weigh the numbers for your situation.

Common Mistakes Buyers Make

• Only saving for deposit and ignoring fees
• Not checking LVR impact on LMI
• Assuming stamp duty is the same in all states
• Overestimating borrowing capacity
• Not accounting for investment property surcharges

What Counts as Genuine Savings?

Most lenders require that at least part of your deposit comes from genuine savings – funds you’ve held in your own account for a minimum of 3 months.

The following typically do not qualify as genuine savings on their own:

• Gifts from family
• First Home Owner Grant (FHOG)
• Tax refunds or windfalls
• Recently received an inheritance

If your deposit includes non-genuine funds, talk to a broker – some lenders are more flexible than others.

Tips to Reduce Your Upfront Costs

• Increase deposit to reduce LMI
• Check first-home buyer concessions
• Compare lender policies before applying
• Consider shared ownership or guarantor loans
• Get pre-approval before committing to purchase

Disclaimer

This calculator is for estimate only. Actual loan approval, fees and costs may vary based on lender policies, government regulations and individual financial circumstances. Always consult a professional financial advisor before making property decisions.